Brazil’s chemicals producer prices rise 1% in August ending year-and-a-half downturn

SAO PAULO (ICIS)–Brazil’s chemicals producer prices rose by 1.02% in August, month on month, ending an 18-month long downturn, the country’s statistical office IBGE said on Thursday.

Year on year, however, chemicals producer prices were 30.75% lower than in August 2022.

Plastic and rubber producer prices fell by 0.56% in August, and by 7.04% compared with August 2022.

Brazil’s overall industrial producer prices rose by 0.92% in August, after six months of falls. Year on year, they stood 10.51% lower than in August 2022.

Much of the increase, according to IBGE analysts, could be attributed to the depreciation of the real during August, making imports into Brazil more expensive for industrial players.

As of Thursday, the Brazilian real (R) was trading at $1:R5.06. In July and preceding months, the real had been strengthening and went as high as $1:R4.72.

“This greater spread of positive variations [in producer prices] is in line with the 2.1% depreciation of the real against the dollar, which has not occurred since March, and which raises the prices of both what we import and what we export,” said Alexandre Brandao, IBGE’s head for the Industirial Producer Prices (PPI in its Portuguese acronym) index.

To compile the PPI, IBGE tracks the average change in sales prices received by domestic producers of goods and services at the factory gate. It surveys around 2,100 companies about their prices, excluding costs for taxes, tariffs, and freight.