Inflation: bread with egg becomes more expensive – 01/23/2023 – Market

Not even the simplest snacks escaped food inflation in Brazil. This is the case of bread with egg, a sandwich that often saves those who have little creativity in the kitchen or are on a tight budget.

In 2022, prices of traditional French bread accumulated an increase of 18.03%, according to the IPCA (National Index of Prices to the Broad Consumer). This is the highest inflation in 14 years, or since 2008 (19.35%).

Chicken egg, in turn, rose 18.45% in 2022. It is the most intense advance in seven years, since 2015 (18.55%).

The increases easily surpassed the IPCA in general terms, which reached 5.79% last year, according to the IBGE (Brazilian Institute of Geography and Statistics).

In the case of French bread, economists say that the main pressure on prices came from the war involving Russia and Ukraine.

After the beginning of the conflict, in February 2022, there was a jump in the prices of wheat, an input used to produce food in bakeries.

Russia and Ukraine are among the main cereal producing countries. Brazil is dependent on wheat imports.

Quotations even showed a truce recently, but the movement was unable to prevent the impact on the consumer’s pocket.

“The root of this rise is in the War in Ukraine”, says researcher Felippe Serigati, from the FGV Agro study center.

In the capital of São Paulo, a kilo of French bread cost an average of R$ 16.21 in December 2022, equivalent to an increase of 18.58% compared to December 2021 (R$ 13.67).

The data are from a survey of the basic food basket carried out by Procon-SP in partnership with Dieese (Interunion Department of Statistics and Socioeconomic Studies).

A dozen white eggs cost R$ 10.63 for São Paulo residents, on average, in December 2022. The value is 28.69% higher than that registered a year earlier (R$ 8.26), according to the same survey by Procon-SP.

Economist Rodolfo Coelho Prates, professor at PUCPR (Pontifical Catholic University of Paraná), estimates that eggs have become more expensive due to a combination of increased production costs and heated demand.

In this sense, Prates points out that the appreciation of soy and corn in the pandemic has put pressure on the prices of feed used to feed chickens.

In addition, he says, there was pressure from demand because eggs represent a cheaper source of protein compared to meat, which remains at a high price level, despite recent signs of truce.

“It’s the two things. The population suffered a process of impoverishment and substituted proteins, and the poultry sector depends a lot on feed”, says Prates.

The high price of eggs is not exclusive to Brazil. In the United States, prices also rose, but for a different reason: avian flu.

The disease caused the death of laying hens, causing a shortage of eggs. With the restricted supply, there was pressure on product inflation.

“Eggs are missing because the people there are having to slaughter the animals”, says Serigati.

In Europe, in addition to avian flu, rising grain and energy costs are also affecting production at the moment. “Eggs are expensive in the world”, emphasizes the researcher.

Scenario for 2023

Serigati assesses that, after the strong rise last year, there is no longer so much room for significant increases in early 2023 in Brazil. The analysis is anchored in the price truce along the production chain at the beginning of this year.

Cepea (Center for Advanced Studies in Applied Economics) indicated that egg prices fell in producing squares in the second week of January with lower demand.

The movement occurred after the record in 2022 of real records (discounting inflation) in the historical series of the institution, started in 2013.

“There is not much reason to continue accelerating at the beginning of the year, but over the next few months there may be some turbulence”, ponders Serigati.

Prates sees egg prices still under pressure. In the case of bread, he assesses that the truce scenario is clearer, given the relief of wheat prices in recent months.

“Wheat is the main factor, although it also has labor costs, the energy needed for production. In a scenario without an increase in other factors, we can expect some decrease in prices”, projects the professor.