Gasoline has the highest inflation in two years; food falls – 04/11/2023 – Market

Filling up the car tank cost more for the Brazilian in March, while preparing a meal at home, depending on the ingredients chosen, may have come out cheaper than in February.

This is what the data from the IPCA (Ample National Consumer Price Index) released this Tuesday (11) by the IBGE (Brazilian Institute of Geography and Statistics) indicate. The official inflation index rose 0.71% last month.

Gasoline, in turn, advanced 8.33% in the same period. As a result, fuel accounted for the main individual impact (0.39 percentage points) on the March IPCA.

The 8.33% increase is the highest for fuel in two years, since March 2021 (11.26%).

According to the IBGE, the result reflects the partial return on federal tax collection. The measure came into force last month and also affected ethanol.

The rise in ethanol prices was 3.20%. This is the biggest advance since November 2022 (7.57%).

“The results of gasoline and ethanol were mainly influenced by the return of federal tax collection at the beginning of the month, established by Provisional Measure 1,157/2023”, said André Almeida, an analyst at the IBGE survey.

Of the 9 groups of products and services surveyed in the IPCA, 8 had high prices in March. The transport segment had the greatest impact (0.43 percentage points) and the greatest change (2.11%) in the index.

Despite the pressure from gasoline, the IPCA decelerated in general terms. The increase of 0.71% was below the advance of 0.84% ​​registered in February.

The behavior of part of food is one of the factors cited by economists to explain the truce in the index.

In March, food at home fell (deflation) by 0.14%. It was the first low after five months on the rise – the last retreat had been in September 2022 (-0.86%).

Among foodstuffs, there was a drop in the prices of potatoes (-12.80%) and soybean oil (-4.01%).

There were also decreases in products such as onions (-7.23%), tomatoes (-4.02%) and meats (-1.06%). On the side of advances, the IBGE highlighted carrots (28.58%) and chicken eggs (7.64%).

In the calculation of the IPCA, food at home is part of the food and beverages group, which slowed down to 0.05% in March, after rising 0.16% in February.

“On the positive side, one of the highlights was on account of food and beverages. The group has the greatest weight and advanced only 0.05%”, said the Original bank in a report.

“This value is even more significant considering that food at home, the most essential, had deflation”, he added.

For the bank, the movement signals a “gradual adjustment” in the production chains in a scenario of better harvest conditions.

André Almeida, from the IBGE, said that one of the factors behind the result of food at home is the recomposition of the offer of part of the products. This year, projections indicate a record harvest in Brazil.

In the case of meat, the analyst recalled that the suspension of Brazilian exports to China may have reduced prices by increasing the quantity of goods destined for the domestic market. The period of Lent also reduces consumption, according to the researcher.