Rice, beans and eggs put pressure on food prices in Brazil – 03/27/2023 – Vaivém

International food prices are at the lowest levels in 17 months, according to the FAO (Food and Agriculture Organization of the United Nations). Brazilian commodities with good traffic in the foreign market maintain the same trend, accompanying foreign prices.

Even so, the cost of basic foodstuffs does not give respite to consumers’ pockets in the domestic market. They rose again in the accumulated result for the last 30 days, according to a survey released by Fipe (Fundação Instituto de Pesquisas Econômicas).

In the third quadrissemana of March, which points to the change in prices in the last 30 days ending on the 23rd in relation to the 30 immediately preceding, food prices increased by 0.51%. It is the fifth weekly high in a row.

Even with this high sequence, food products may end the last 12 months with an accumulated level of less than 10%. This has not happened since January of last year. Fipe will release data for March in early April.

After reaching a very high level, food prices stopped rising, but they are still far from the normal values ​​of four years ago.

Currently, the increase has basically been caused by foods whose production is in the domestic market, such as rice, beans, greens, fruits and vegetables.

Food pressure may return with greater intensity in the coming weeks, mainly because of proteins. With the reopening of the Chinese market for beef (announced the week following the automatic suspension of exports due to the case of mad cow in Brazil, which turned out to be atypical) and due to new sanitary problems in the pork sector in the country Asia, the Chinese appetite should give new prices to the Brazilian domestic market.

Responsible for the consumption of 21% of Brazilian beef production and for 62% of what Brazil exports, China should give greater support to prices of live cattle in the field. In the last 30 days, with a smaller presence of the Chinese in the domestic market, beef fell 1.94%.

Pork, which had already been accumulating high, should have a greater opening in the Chinese market if the African swine fever intensifies, as the country’s authorities have been warning.

Large consumers of this protein, the Chinese became more dependent on the foreign market from 2018, when African swine fever spread through pig farms.

Soybean oil, after rising 164% from 2019 to 2022, again experienced a price reduction. Domestic demand for this product, however, should grow from next month, when the blend of biodiesel with diesel oil will rise from 10% to 12%. At least 70% of biodiesel has soy as raw material.

This occurs, however, at a time when Brazil has a record harvest of 155 million tons and the external and internal prices of soy retreat.

Coffee and sugar, two products that have skyrocketed in price in recent years, are starting to make a comeback, although their prices are still quite high.

The milk, after the resumption of highs at the end of last year, begins to fall. With renewed pastures, due to the rains, and lower costs for feeding the cattle, the offer should be greater, and the high, lose strength.

“In natura” products, which were also affected by excessive rainfall, should reverse the upward trend in the coming weeks with the improvement of weather and the return of planting and production.

One of the main problems for consumers, especially those with lower incomes, continues to be the acquisition of basic products, due to high prices.

The egg accumulates high of 10.2% in the four-week period.

Rice, despite the harvest period, keeps prices high. In the last 30 days, the cereal was 0.7% more expensive in supermarkets in São Paulo, according to Fipe. In the four previous years it had already risen 67%.

Beans, after rising 110% from 2019 to 2022, accumulate 5.4% this year. The main variants of the rice and bean price increase do not come from the external market, but from a recomposition of the internal production area. They lose ground to other cultures.

The international scenario for producers is more challenging this year due to the slowdown in prices, but it may look better for consumers. World stocks are still falling, with the exception of soybeans, but this year’s production exceeds that of the previous period.

Brazil and the United States, two of the world’s main suppliers of food, have increased production areas and are expecting larger harvests. The Brazilian harvest, if the weather helps, could reach 310 million tons, and the US will have a 9% increase in soy, wheat and corn production.