Milk price rises more than 25% in July

The price of long-life milk soared 25.46% in July in the country, indicated this Tuesday (9) the IBGE (Brazilian Institute of Geography and Statistics).

With the increase, the product had the greatest positive impact (0.22 percentage point) on Brazil’s official inflation index, the IPCA (Broad Consumer Price Index).

The surge in milk came after an advance of 10.72% in the previous month (June). In the year, the product started to accumulate a high of 77.84% until July. In 12 months, the increase reached 66.46%.

According to Pedro Kislanov, IPCA research manager, the rise in prices is associated with at least two factors.

The first is the off-season, which usually reduces the supply of milk on the market from March to September or October.

The second is the escalation of production costs. During the pandemic, inputs such as animal feed, fertilizers and fuel became more expensive. The side effect is the pass-through to prices on supermarket shelves.

Milk derivatives also rose for the consumer in July, shows the IPCA.

The cheese advanced 5.28%. Powdered milk was 5.36% more expensive. Butter had an inflation of 5.75%. Condensed milk recorded an even higher rise of 6.66%.

In the food and beverage group, which accelerated to 1.30% in July, the IBGE also highlighted the increase in fruit prices. The advance was 4.40% last month.

Watermelon recorded a rise of 31.26%. It was the most intense variation among the 377 sub-items surveyed in the IPCA. Papaya, in turn, rose 13.52%.

On the side of falls in food, the biggest drop came from tomatoes, 23.68%. The sub-item still accumulates a high of 7.45% in 12 months.

The IPCA, in general, had deflation (fall in prices) of 0.68% in July. It is the biggest drop since the beginning of the historical series, in January 1980, according to the IBGE.

The downturn was driven by the reduction in gasoline. With the recent ICMS (state tax) rate cuts, fuel dropped 15.48% in July.

It was the main impact (-1.04 percentage points) for the reduction of the IPCA. In 12 months, gasoline accumulated a high of 5.64%.

The ten biggest price hikes in July

According to the IPCA, in %

The ten biggest price drops in July

According to the IPCA, in %