Inflation: eggs accumulate the highest price increase in a decade – 07/16/2023 – Market

Home food prices lose strength in the IPCA average (National Index of Prices to the Extended Consumer), but there are still specific products that weigh on the pocket of the Brazilian. This is the case of the traditional chicken egg.

In the period of 12 months until June, food accumulated inflation of 22.93% in the country, according to the IBGE (Brazilian Institute of Geography and Statistics).

This is the biggest increase in egg prices in a decade, since July 2013. At the time, the advance had been 24.54%. The IPCA is considered the official inflation index in Brazil.

According to André Almeida, an analyst of the IBGE survey, the high cost can be associated with issues such as the lower supply caused by the increase in production costs.

“In addition, egg consumption grew in Brazil, due to high prices in competing proteins”, he says.

In periods of high meat inflation, as in recent years, eggs are often seen as a cheaper substitute for protein. When there is greater demand for the product, the tendency is for pressure on prices.

Economist Lucas Dezordi, professor at PUCPR (Pontifical Catholic University of Paraná), also assesses that the high price of eggs is related to issues such as lower supply and increased production costs after the pandemic and the Ukrainian War. He, however, projects that prices should have “accommodation” or even fall in the coming months.

The reason, according to Dezordi, is the recent decline in prices for inputs used in egg production, including corn, the basic food for chickens.

This relief is already reflected in other foods surveyed by the IPCA, such as most meats. Breast (-10.50%), liver (-10.09%), shoulder (-9.22%) and rump (-9.09%) are the beef cuts with the biggest falls in the index’s 12-month accumulated of inflation.

Chicken pieces (-3.94%) and whole chicken (-0.98%) also had price reductions in the period.

“Even with the 22.93% increase, the egg is a cheaper protein compared to meat, mainly beef. This increase still takes a lot from the beginning of the year”, says Dezordi.

“The expectation is for accommodation or even a drop in prices. Corn is decreasing, soybeans are decreasing, meats are falling. All this can help so that egg prices suffer a fall”, he completes.

Considering the 377 sub-items (goods and services) that make up the IPCA, chicken eggs accumulated the ninth highest price increase in the 12 months through June.

It was second only to tangerine (52.5%), yam (46.95%), baby fish (40.79%), manioc flour (34.93%), banana-apple (32.62%), sweet potato (29.6%), watermelon (24.9%) and baby food (23.27%).

In terms of average food consumed at home, inflation slowed to 2.88% in the 12 months through June. It is the smallest variation since October 2019 (2.84%).

In the specific case of chicken eggs, the capitals with the highest price increases up to June were Belo Horizonte (31.92%), Aracaju (30.36%) and Goiânia (28.94%). In São Paulo, food rose 24.51% in the same period.

Dúzia goes from R$ 13 in SP

In May, the São Paulo consumer paid an average of R$ 13.10 for a dozen white eggs, according to a survey of the basic basket carried out by Procon-SP in partnership with Dieese (Inter-union Department of Statistics and Socioeconomic Studies).

The price was 30.9% above the value registered a year earlier (R$ 10.01), in May 2022. “The record exports of eggs and the cold weather, which reduces the productivity of laying hens, led to a decrease in supply, which which made the product more expensive”, stated Procon-SP in a note.

The high price of food is not exclusive to Brazil. In the United States, prices also rose in 2023, 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.