Onion price goes from less than R$3 to more than R$7 in a year

In a scenario of reduced supply, onions became more expensive for the Brazilian consumer. In 12 months through October, product prices have accumulated a high of 135.87%, according to the IPCA-15 (National Index of Consumer Prices Extended 15).

It is the biggest advance among the 367 sub-items (products and services) that make up the previous inflation indicator, according to data released this Tuesday (25) by the IBGE (Brazilian Institute of Geography and Statistics).

After onions, lemons (75.28%), melons (48.90%) and water bananas (44.54%) were the sub-items that increased the most in the 12-month period up to October, according to the IPCA-15.

Another survey, that of the basic food basket of Procon-SP, also gives a dimension of the increase. In the city of São Paulo, the average price of a kilo of onion jumped from BRL 2.75 in September 2021 to BRL 7.29 in the same month of 2022, according to the survey.

This corresponds to an increase of 165.09% in the period of one year. It is the biggest price variation within the São Paulo basic food basket.

“The main factor for the increase in 2022 is the reduction of the planted area”, evaluates Marina Marangon, a researcher at Cepea (Center for Advanced Studies in Applied Economics), at Esalq/USP.

An estimate by the institution signals a drop of almost 18% in the area planted with onions in the Southeast, Midwest and Northeast regions in 2022, compared to 2021.

“The year 2021 was of very low prices, and producers had losses. They were not able to cover the costs of the harvest. So, they reduced the planted area”, says the researcher.

“We had a more restricted supply this year. There was still the impact of climate issues, such as heavy rains”, he adds.

According to her, prices may have some respite from November, with the prospect of a greater supply with the crop in the South.

Last week, Conab (National Supply Company) drew attention to the reduction of planted area in the Northeast.

“For onions, prices rose even with the spraying of the product’s supply by Brazilian states. This scenario is explained by the lower production recorded in the Northeast, most notably in Bahia and Pernambuco”, he said at the time.

“In the accumulated result for the year, the percentage of drop in supply from the Northeast, in relation to 2021, is close to 40%. “, he added.

At the other end, ethanol (-26.38%), tomato (-21.84%) and mutton (-21.48%) had the biggest drops in the IBGE indicator. The IPCA-15, in general, rose 6.85% in 12 months.

In the monthly variation, the onion had a high of 5.86% only in October. The product was one of those responsible for the 0.21% rise in the food and beverage group, which had retreated in September.

The highest monthly variation in October in the IPCA-15 came from lemons: 40.20%. The increase, indicates the IBGE, is associated with seasonal factors. The lemon off-season normally takes place between August and November.

“This makes the offer of the product smaller. This was the cause of the high”, says the institute.

After lemons, the sub-items that advanced the most in the IPCA-15 of October were banana-apple (32.33%), airfare (28.17%) and potato (20.11%).

On the other hand, those that registered the biggest drops were watermelon (-10.03%), long-life milk (-9.91%) and ethanol (-9.47%).

In the 12-month period, the food and beverage group advanced 11.43% until October, according to the IPCA-15. This means a deceleration compared to September, when the advance was 12.73%.

“Although it is still at a high level, food inflation has been losing steam. Under normal conditions, it should continue to decelerate in the accumulated. But there is a problem: normal conditions are what we have faced the least in the last three years”, says researcher Felippe Serigati , from FGV Agro.

In this sense, he assesses that there are still risks to the final truce in food prices. Among them are the behavior of the exchange rate in the pre- and post-election period, in addition to the uncertainties associated with the Ukrainian War and the supply of agricultural inputs.

“Inflation should slow down, but there are factors that can harm it”, reinforces the researcher.

Biggest rises in the IPCA-15 in October, in %

Highest rises in the IPCA-15 in 12 months through October, in %

Source: IBGE