Itaú BBA - Itaú Commodity Index - Inflation (ICI-Inflation)

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Itaú Commodity Index - Inflation (ICI-Inflation)

October 5, 2018

This index incorporates shocks from international commodity prices on inflation in Brazil.

Our index incorporates shocks from international commodity prices on inflation in Brazil. In order to capture the impact of international commodity prices on Brazilian inflation as measured by the consumer price index (IPCA), we considered international monthly average prices for 20 commodities (in U.S. dollars, next due date on futures contracts) weighted by their relevance to local inflation. Together, these commodities explain about 60% of the change in market-set prices in the IPCA and were divided into three groups:

Food: sugar, wheat, corn, live cattle, soybeans, coffee and cocoa;

Industrial: iron ore, copper, aluminum, cotton, nickel, gold, lead, tin and zinc;

Energy: crude oil and natural gas.

 

Food: greater relevance to the IPCA. According to the new index, prices for food-related commodities (ICI-Food) account for approximately 50% of the headline index, with wheat, sugar and corn being the most significant items. Meanwhile, ICI-Industrial and ICI-Energy sub-indexes represent 21% and 26%, respectively.



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