According to the Producer Price Index (PPI) for the manufacturing and extractive industries published by the Brazilian Institute of Geography and Statistics (IBGE), prices in Brazil’s domestic industry climbed by 0.34% in January as opposed to 0.14% in December.
After ten consecutive negative readings from February to November 2025, the January result represents the second consecutive positive monthly rate.
The monthly change was 0.15% in January 2025.
The index saw a 4.33% fall over the previous 12 months despite the recent resurgence, highlighting the larger downward trend that has defined producer prices.
The PPI covers important economic categories in the manufacturing and extractive industries and measures prices “at the factory gate,” excluding freight and taxes.
Leading monthly advance in metallurgy
Fifteen of the twenty-four industrial activities that were assessed had positive pricing changes in January when compared to the prior month.
Fourteen activities showed increases in December.
Metallurgy (2.73%), printing (2.73%), other chemical goods (1.70%), and perfumes, soaps, and cleaning products (1.67%) had the biggest increases in January.
The industry with the biggest impact on the index as a whole was metallurgy.
Higher prices for non-ferrous metals were the main cause of the sector’s 2.73% increase, according to PPI manager Murilo Alvim.
He focused on copper contracts, which have been dealing with low stocks and supply shortages, and gold derivatives, whose prices were raised by increased demand.
Of the 0.34% increase in industry prices, metallurgy alone contributed 0.18 percentage points.
Extractive industries contributed 0.06 percentage points, petroleum refining and biofuels subtracted 0.07 percentage points, and other chemical products contributed 0.13 percentage points.
Rising fertiliser prices were the primary cause of the 1.70% increase in other chemical products.
After already affecting a large share of phosphate concentrates in December, rising costs for imported inputs, particularly sulfur derivatives, intensified at the start of the year.
Impact of exchange rates on various horizons
The exchange rate, which typically helps explain movements in the Industrial Producer Price Index (IPP), also contributed to the 12-month trend.
Over that period, the US dollar fell 11.3% against the Brazilian real, helping drive the decline in the index.
However, the monthly data tell a different story.
Between December and January, the dollar also weakened by 2.1%, yet the IPP recorded a positive reading.
This suggests that other factors more than offset the currency’s decline and ultimately pushed the index higher.
The food industry continues its downward trend
The monthly indicator did not highlight the food industry, which has the largest weight in the index at about 24%.
The sector’s prices dropped 0.17% between December and January, the ninth consecutive decline.
The extended series has resulted in a cumulative contraction of 9.84% over the last 12 months, despite the fact that the most recent monthly decline was not particularly severe.
Food thus emerges as the primary factor influencing the index’s total 12-month performance.
The sector’s economic groupings all saw declines, but sugars stood out.
Over the course of the 12-month period, the sugar group had a cumulative decline of 28.30%, which is indicative of declining international prices in the face of a plentiful global supply and high productivity.
The reduction was also influenced by the real’s increase against the dollar during that time.
The overall index is driven by intermediate goods
Capital goods experienced a 0.70% decline in January as viewed through the lens of key economic categories.
Consumer goods increased by 0.26%, while intermediate goods increased by 0.54%.
Durable consumer goods saw a 0.22% increase, while semi-durable and non-durable products saw a 0.27% gain.
Among the broad categories, intermediate goods had the most impact.
They contributed 0.29 percentage points of the 0.34% variation in the extractive and manufacturing industries, with a weight of 53.76% in the total index composition.
Consumer products made up 0.10 percentage points of the monthly total, with durable goods accounting for 0.01 percentage points and semi-durable and non-durable goods for 0.09 percentage points.
Conversely, capital goods had a negative impact of 0.06 percentage points.
The PPI survey, which focuses on producer prices free of taxes, tariffs, and freight, gathers about 6,000 prices from little over 2,100 businesses each month.
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