Inflation: food has the lowest pressure in 45 months – 7/4/2023 – Shuttle

Food products maintain a downward trend and recorded, in June, the biggest price reduction in 45 months in São Paulo. Last month, they had deflation of 0.80%, which inhibited an evolution of the average inflation rate.

According to Fipe (Fundação Instituto de Pesquisas Econômicas), average inflation in June was practically stable in the city of São Paulo, with a decrease of 0.03%.

The drop in food prices in supermarkets reflects what happens in the countryside. With a greater supply of products and, so far, without the occurrence of severe weather effects, as in 2021 and 2022, the prices of most products are falling.

In addition to an improvement in domestic supply, prices at the gate reflect the global slowdown in commodities. International grain production has improved, and stocks are being replenished, which has led to a drop in international prices.

The internal retraction of prices spreads across almost all food segments. Of the 20 major downward pressures on the inflation rate, 16 are from agriculture.

The behavior of food prices in this period of the year differs from what occurs in previous years, when the trend was upward. In June last year, food inflation accelerated to 0.93%

Food, one of the main pressure factors in the last four years, when they accumulated a 30% increase in São Paulo, register an evolution of only 1.35% in the first half of this year. General inflation is 2.1%, according to the Fipe survey.

The main falls in the month favor lower income consumers, since they occurred in beans, chicken, milk and tomatoes. Rice and bread, however, are at the other end, still rising.

Lesser supply of the product makes São Paulo consumers pay 7.5% more for rice in the first six months. Already the bread still suffers the effects of the pressure of the wheat in the international market, although this is already smaller.

Meat, a major pressure factor in previous years, due to exports and heated international prices, changed its trend. In the first half of this year, beef had a retraction of 6.6%; chicken, 14.3%, and pork, 4.6%.

In the case of beef, all 14 cuts listed in Fipe’s research list showed a drop in prices in June, a behavior that is repeated in the accumulated result for the year.

This semester, the beef rib has retraction of 5.6% in price, and filet mignon, 6%. The picanha, which was 1.2% cheaper last month, accumulates fall of 5.7% from January to June.

Main price increase from 2019 to 2022, when it had accumulated a 164% increase for consumers, due to strong external demand for Brazilian soy, soy oil has been contributing for several months to contain the inflation rate. This year, prices have already dropped 24% on supermarket shelves.

The pressure also decreases on other basic foodstuffs, such as cornmeal and corn flour, but continues on eggs, which had a 23% readjustment in the year.

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