Producer prices in Brazil fall in December, but have a record high in 2021

You prices to the producer in Brazil they had the first drop in more than two years in December, but they still closed 2021 with a record advance in the historical series started in 2014, pressured by factors such as exchange rate, high raw materials and the weather.

In December, the prices to the Producer (IPP) registered a decrease of 0.12% in comparison with November, when there was a high of 1.46%. It was the first negative result after 28 months, according to data from this Tuesday (1) from the Brazilian Institute of Geography and Statistics (IBGE).

Despite that, the prices in the industry closed the year 2021 with an accumulated high of 28.39%, a record rate, after an advance of 19.38% in 2020.

“We can enumerate the exchange rate (as a factor for the 2021 result), whose depreciation reached almost 10%; market behavior to the throughout the year, with considerable increases in the price of iron ore, crude oil, food such as sugar and meat”, explained IBGE manager Alexandre Brandão.

He also highlighted the impact of the pandemic on production chains, as well as the climate, explaining that the winter was harsh and caused problems in the sugar and coffee crops, for example.

Among the 24 activities analyzed, the IBGE pointed out that the two biggest falls in December occurred in mining and quarrying (-12.77%) and metallurgy (-3.27%).

In the year, the highlights were petroleum refining and biofuels (69.72%), other chemical products (64.09%), metallurgy (41.79%) and wood (40.76%).

The IPP measures the variation of prices of products at the “factory door”, that is, without taxes and freight, of 24 activities in the extractive and transformation industries.