Rising prices of raw material hit industries

A survey carried out by the National Industry Confederation (CNI) and released today (Jun. 1) shows that the rise in prices of inputs and raw materials hit the industrial sector unexpectedly in March. The price increase has exceeded the expectations of 71 percent of the companies in the extractive and transformation industry, and 73 percent in the civil construction industry, the document says.

According to CNI, 58 percent of the companies in the extractive and manufacturing industry, and 68 percent in construction have reported higher price increases than expected for imported inputs. For the confederation, the war between Russia and Ukraine has worsened the disruption of supply chains. As a result, in addition to delays and interruptions in the supply of inputs, prices have increased.

“In five sectors - rubber products, biofuels, metallurgy, motor vehicles, and cleaning products - the general increase in prices has surprised more than 80 percent of the companies. The high cost of imported inputs has exceeded the expectations of 100 percent of biofuel companies, 94 percent of the rubber products industries, 75 percent of the printing sector, and 73 percent of the chemical industry,” CNI informed.

Delays in supply chains have generated a reconfiguration in the production of Brazilian industries, especially in those that depend on imported inputs, with reflections on 40 percent of the general industry (extractive and processing), and 54 percent of the construction industry, the survey reads.

These industries had to change their strategy for acquiring inputs and raw materials and look for suppliers in Brazil. Among the companies that have started buying in Brazil, 43 percent of the general industry (extractive and processing), and 50 percent of the construction industry have declared they are looking for other suppliers within the country.

The share of Brazilian companies seeking alternative suppliers outside the country is 18 percent in the extractive and transformation industry, and 3 percent in civil construction.

The survey shows that 39 percent of the companies in the extractive and manufacturing industry expect normalization of the supply of inputs and raw materials this year. The percentage of companies in the general industry and construction that expect normalization only in 2023 is 25 percent.