Basic basket inflation gives truce in May, but rises almost 27% in 12 months

The basic food basket inflation index in Brazil fell by 0.71% in May, according to a study by professors of the economics course at PUCPR (Pontifical Catholic University of Paraná).

It was the first drop in the indicator since December last year. The truce came after basic basket inflation soared 5.27% in March and 5.55% in April.

The increases above 5% had occurred in a context of high costs for food production, supply restrictions due to adverse weather and high agricultural commodities due to the Ukrainian War.

Even with the monthly relief, the inflation of the basic food basket is still around 27% in the accumulated of 12 months, harming mainly the poorest, who have less financial conditions to face the high price.

In the accumulated until May, the rise in prices was 26.75%, according to the PUCPR study. On this basis of comparison, the advance until April was 28.90%.

The basic food basket also remains distant from the general inflation index in Brazil, the IPCA (Ample National Consumer Price Index). Until May, the IPCA rose 11.73% in 12 months.

“The deceleration of prices is good news, but the basic food basket remains above 25% in 12 months, with an increase of almost 27%. It is more than double the IPCA. Prices are still under pressure”, says economist Jackson Bittencourt , coordinator of the economics course at PUCPR.

The university’s study is based on inflation data for 13 foods within the IPCA, which is calculated by the IBGE (Brazilian Institute of Geography and Statistics).

Tomato falls 23.72% in the month

According to Bittencourt, the drops in the prices of tomatoes (-23.72%) and silver bananas (-4.24%) helped the basic basket index to retreat 0.71% in May. Potatoes (-3.94%) also had a low.

In addition, beef (ribeye) was practically stable, with a slight negative variation of 0.07%.

“What happened was the impact on prices of the increase in the supply of some agricultural products, such as tomatoes”, says the professor.

“The offer was recomposed after the effects of the weather, and the high price attracted other producers”, he adds.

On the other hand, the biggest increases in the basic food basket in May were observed in the following products: carioca beans (7.31%), long-life milk (4.65%) and manioc flour (2.47%).

The study was published by PUCPR during the second half of last year. Series registrations began in September.

At the time, basket inflation was 15.96% in the 12-month period. The IPCA was at 10.25% at the time.

According to Bittencourt, it is likely that food will continue at a high level in the coming months, but in the process of deceleration after the shocks at the beginning of the year. “Prices will remain high, but the rise should be less intense,” she says.

Coffee accumulates high of 67.01%

In the accumulated of the last 12 months, the biggest increases in the basic food basket were verified in ground coffee (67.01%), in tomatoes (55.62%), in potatoes (54.30%), in crystal sugar (31 .46%) and in soybean oil (31.25%).

Long-life milk (29.28%), margarine (23.96%), silver banana (23.60%) and carioca beans (19.03%) also skyrocketed. The only drop in prices within the basket was registered by rice (-10.27%).

With persistent inflation and difficulties in the job market, Brazil began to accumulate scenes of people looking for food donations and even food leftovers during the pandemic.