Producer prices in Brazil start to fall 0.3% in February 2023

Producer prices in Brazil fell by 0.3% in February due to deflation in the segment of other chemical products, the Brazilian Institute of Geography and Statistics (IBGE) said on Wednesday.

The result, the third lowest rate for February since the beginning of the historical series in 2014, led the index accumulated in 12 months to an increase of 1.38%. In the previous month, the Producer Price Index (IPP) had risen by 0.29%.

The IBGE pointed out that three sectors with the most significant weight in the index had price reductions. The greatest negative influence was exerted by other chemical products, followed by petroleum refining and biofuels and food.

"The chemical industry has the greatest negative impact largely due to the drop in prices of products used in farming: manure and fertilizers and fungicides," explained Index Manager, Alexandre Brandão.

According to him, this movement is due to the reduction in demand and the stabilization of prices after the increases caused by the war between Russia and Ukraine.

Among foodstuffs, the highlight was the drop in the prices of margarine and soy oil, given the reduction in international prices for soy.

The IPP measures the variation in product prices at the "factory gate", excluding taxes and freight, for 24 extractive and transformational industries.