Soy pressure on wholesale prices is difficult to sustain

Main factor of pressure on wholesale prices on general price index-10 (PGI-10) July high of soy producers trading strategies reflects on the expectations surrounding the American harvest, with harvest in August. With a weight of 4.7% in the producer price index (IPA) the product can still go up in the short term, but the movement is difficult to sustain given that the Brazilian crop grew 11.6% in 2015, to 96.4 million tons, analyzes the Deputy Superintendent of Inflation of Fundação Getulio Vargas (FGV), Solomon paintings. The PGI-10 rose 0.75% in July, the move explained essentially by the advancement of 0.70% of the wholesale price, twice the month of June (0.34%).
"The market will continue a little nervous by the proximity of the soy crop in the United States," says Frames. He explains that the estimates for the American crop is good, but it's natural to be a species of pré-safra voltage by uncertainties in relation to climate. "But there is no reason for a consistent increase in the price of soybeans or on the supply side or demand. What happens is that at the time the farmer has breath to speculate a bit ", he concludes.
Beyond the leap of soybeans (from -1.39% to 3.03%), other raw materials agricultural gross had negative effect on the IPA. The birds ( -1.92% to 6.89%) and grain maize, which stopped slow ( -6.07% to -0.26%). "It's a movement that appears on time and connected to the great weight of soybeans, which has swings, the indicator", points out paintings. The FGV Economist also points out that another raw material with expressive weight (3.4%), iron ore, should show slowdown after its international listing to have fallen under $ 50 per tonne in recent weeks. In July the ore was one of the major high, keeping a level close to that of June, with 5.20% rate.
Frames don't believe a significant transmission of inflation at wholesale to retail due to the high of soy in the next IGPs. "In the case of retail there is a balance of weight derived from other products, such as wheat," he explains. The IPC-10, discharging the retail prices slowed in July to 0.69% 0.80% the previous month. The main reason was the lowest price adjustment impact of lottery games, which according to Tables tends to disappear by the end of the month.
Despite the CPI still face some administered prices pressure-such as increased energy tariffs-the relief on items such as food, clothing and airfares, in decline after the peak vacation, should prevail. An example is the onion, villain of the prices in 2015, though that's still man comes returning high. In July the product rose 15.44 percent, against 39.14% a month earlier.
Already the national index of construction (INCC) went into downward phase, after a series of wage adjustments in Rio and Sao Paulo. "The cost of labor is down the slope and materials do not have high perspective with the weak economic activity," he says.