QCOSTARICA – Supply and demand. Commodity prices reached the highest value in eight years in May 2021, according to a new indicator, the international price index of some imported raw materials (IP-MPi) by Costa Rica, by the Banco Central (Central Bank)
The index, in its first publication, measures the average monthly variation of the international prices of some raw materials considered relevant in the Costa Rican economy. The indicator is based on 2017, at that time it is worth 100 and from there changes are measured.
The index incorporates prices of grains (wheat, corn, soybeans and rice), metals (iron, steel, aluminum, zinc and copper) and crude oil (unrefined oil) in international markets.
These products represent 15% of Costa Rica’s total imports and 35% of raw material imports (average from 2013 to 2020), the monetary authority explained in a statement.
The recently published series registers a significant slowdown at the beginning of 2020, as a result of the effects caused by the covid-19 pandemic, which reached its minimum in April of that year, but from that moment on, sustained growth has been observed. in the prices of raw materials, reaching levels that have not been observed in the entire period covered by the indicator.
These increases affect local prices, as it has already begun to be felt, according to the Central Bank
For example, the 9% increase in the value of wheat flour, in effect on Thursday, July 1 by the company Molinos de Costa Rica, puts pressure on the consumer prices of bread, cookies and pasta.
“The effect of changes in the international prices of these goods is evidenced first in import prices, then in the domestic prices of products manufactured in the country that use these raw materials as inputs, and later in consumer prices,” is detailed in the methodology document.
For example, a variation in the international price of corn (which is used as an input for the production of animal feed) will affect the price of food for animals of national production, in a subsequent stage, it will have an impact on the producer price of meat and finally in the consumer prices of that good.
The new index will be published on the Central Bank website on the fifth business day of each month.