In Brazil, food prices soar

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Rio de Janeiro | Black beans up nearly 30%, beef nearly 40% … Brazilians are facing soaring food prices, caused in particular by record exports to China, and strong domestic demand.

This surge, which occurs against the backdrop of the economic and social crisis linked to the coronavirus pandemic, has led Brazilian President Jair Bolsonaro to ask retailers to show “patriotism” and “to keep their profit margins as low as possible. “.

While the Consumer Price Index (IPCA), measured by the Brazilian Institute of Geography and Statistics (IBGE), has risen 0.7% since the start of the year, it has recorded an increase of 6 , 10% for food at home.

Among the staples of the daily diet in Brazil, rice saw its price climb by nearly 19.3%, black beans experienced an inflation of 28.9%, corn flour by 8.1% and 18.6% soybean oil.

Regarding animal proteins, the consumer price index, calculated by the Getúlio Vargas Foundation (FGV) between September 2019 and August 2020, increased by 38% for beef and 7.5% for poultry meat. and eggs and 19.4% for pork.

China’s appetite

This surge can be explained in particular by the growing appetite of foreign buyers, and in particular from China, in a context of the sharp depreciation of the Brazilian real against the dollar (-36% in one year) and of the trade war between Beijing and Washington. – which leads the Asian giant to buy more in Brazil.

The harvest of soybeans and corn, of which Brazil is respectively the world’s largest and third producer, according to data from the United States Department of Agriculture (USDA), is expected to reach historic levels this year.

But this competitiveness on the world market has “reduced the supply of these foodstuffs on the Brazilian market”, farmers preferring to export them, André Braz, FGV economist, told AFP.

The volume of soybean exports from Brazil to China increased by 29.5% between January and August compared to the same period last year, according to data from the Ministry of the Economy, while production Brazilian soybean should this year register an increase of 4.3%.

At the same time, the inflation of grains and oilseeds has caused higher production costs for beef, chicken and pig farms fed on soybean and corn flour.

“The erosion of the Brazilian cattle herd for two years” and the growing demand from China have also put pressure on the price of this animal protein, explains Thiago Bernadino, sector specialist at the Center for Advanced Studies in Applied Economics of the University of São Paulo (Cepea).

Vice-President Hamilton Mourão for his part attributed on Wednesday the increase in food prices to domestic consumption, and in particular to that made possible by the monthly emergency aid of a hundred euros paid since April by government to the most precarious Brazilians, halved in September.

According to him, this aid led households to “eat better”, because the money injected was “much higher than what people were used to”.


However, experts put this factor into perspective: “At the time of social isolation, there was an acceleration in demand for foods to be prepared at home, such as beans, the harvest of which was not good at the time. Government assistance then drove this demand, but that alone does not explain this inflation, ”says Braz.

Regarding rice, “its demand had decreased, leading to a drop in price and production. The sector was more or less in balance, but with the arrival of the pandemic, there was a shock in demand in the face of already reduced stocks, ”notes Lucilio Alves, researcher at Cepea.

“The problem is that the government is abandoning its policy of buffer stocks, which allowed it to intervene in the event of high inflation,” points out Enori Barbieri, vice-president of the Agricultural Federation of the State of Santa Catarina (FAEC).

He believes that the tax exemption on rice imports announced Thursday, September 10 will not have a pronounced impact on the price in supermarkets: “We will not run out, but due to the exchange rate, these imports will all the same to be expensive ”.

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