Milk price exceeds gasoline price

The price of a liter of milk has climbed in recent months and has surpassed that of gasoline in cities like São Paulo, research indicates. The situation reverses the previous situation, in which the drink cost less than the fuel.

From June to July, the average value of a liter of UHT milk jumped 24.8% in São Paulo, reaching R$ 6.79, according to a survey by Procon-SP in partnership with Dieese.

This mark exceeds by 14.1% –or R$0.84– the average price of a liter of regular gasoline in the municipality in July, calculated at R$5.95 by the ANP (Agência Nacional do Petróleo, Gás Natural e Biocombustíveis).

Fuel dropped 13.5% last month in São Paulo, in a similar movement to other cities in the country, according to the agency’s research.

In July last year, the liter of gasoline in the city of São Paulo was at R$ 5,468, according to the ANP. The value was 38.4% higher than the average price of a liter of milk at the time, calculated at R$ 3.95 in the survey published by Procon-SP.

Also in July last year, consumers from São Paulo spent R$ 13.04, on average, to buy a liter of milk (R$ 3.95) and a 500-gram packet of powdered coffee (R$ 9.09). .

A year later, in July 2022, the total amount was 71.5% higher: BRL 22.36. In addition to the price of milk rising to R$6.79, coffee also advanced to R$15.57. Coffee increased in a context of firm global demand and lower domestic supply.

The drop in gasoline, say analysts, is associated with the cut in ICMS (state tax) rates on fuel.

The ceiling for collecting the tribute was sanctioned at the end of June by President Jair Bolsonaro (PL), who is trying to contain inflationary pressure and improve his popularity on the eve of the elections.

Oil also began to show signs of a truce in the international market recently, which gave Petrobras ammunition to reduce prices at refineries.

This Monday (15), the state-owned company announced the third consecutive cut in the value of gasoline since the second half of July.

Milk, in turn, soared with the effects of the off-season, which should extend until September or October, according to analysts.

With drier pastures in the countryside, cow productivity declines, and animal feed is supplemented with feed, whose prices have risen throughout the pandemic.

The lower supply of the beverage on the market and the high production costs lead to inflation of the beverage on the rise.

The situation weighs more heavily on the pockets of the poorest, who commit a larger share of their budget to the purchase of basic necessities, such as milk, and do not have their own car.

“In gasoline, the big issue was the tax. At the same time, there is also now a price drop in refineries”, says economist André Braz, from FGV Ibre (Brazilian Institute of Economics of Fundação Getulio Vargas).

In July, fuel and milk were featured in the IPCA (National Broad Consumer Price Index), the country’s official inflation index calculated by the IBGE (Brazilian Institute of Geography and Statistics).

Gasoline, on the one hand, dropped 15.48%. Thus, it had the greatest individual impact on the deflation (fall) of 0.68% of the IPCA.

Already milk rose 25.46%, according to the IBGE. As a result, it exerted the greatest upward pressure on the index.

“The perception of the fall in inflation was greater for those who have already managed to fill the tank of the car spending less money”, points out economist Fabio Astrauskas, from Siegen Consultoria.

“The population that depends on buses, public transport, has not yet noticed, even because a part of the food continued to rise”, he adds.

According to him, the trend is that food and beverage inflation, including milk, will slow down in the second half, after a succession of increases.

This, however, does not mean that basic products will stop weighing on consumers’ pockets, especially the poorest, ponders Astrauskas. Production costs remain under pressure.

Braz, from FGV Ibre, follows the same line. He also projects breathless prices for food and drinks, but at a still high level. “Food slowing tends to be slower,” he says.