At the beginning of this month, food inflation registers the lowest four-week rate of evolution in 17 weeks in São Paulo. The high was 0.19%. General inflation was 0.52%.
Food inflation slows down, but the effects have not yet reached the population with lower purchasing power. The retreat occurs in industrialized products and meats, but remains high in basic items such as rice, beans, milk and bread.
The data are from Fipe (Fundação Instituto de Pesquisas Econômicas), which monitors the prices of families earning from 1 to 10 minimum wages every four weeks.
The quadrissemana includes the average price of four weeks in relation to the immediately preceding four. The rate for the first quadrissemana in February is the result of comparing average prices from January 8 to February 7 with those from December 8 to January 7.
During this period, rice, beans, bread and milk were the items that most impacted low-income consumers’ pockets.
As for “in natura” products, despite the strong rise in 12 months, many are still accelerating. These are the cases of lettuce, cabbage, potatoes, chayote and papaya.
Food inflation recedes due to lower pressures from industrialized items, meat and its by-products. Even with the downward trend, average food prices still reach a 12-month high of 13.8%, a rate well above the 7.2% average inflation for the period.
The internal and external perspectives are not good for basic products, which should continue with high prices. On the domestic side, there are expectations of a decline in production. From abroad, whenever the dollar rises, it gives new perspectives to exports, including basic items.
The internal rice harvest, which already pointed to a new fall this year, is even more uncertain with the drought in Rio Grande do Sul, the largest producer of the cereal in the country. Externally, there was a drop in production in the US, a major supplier to the world market. The same is true in Asia.
As a result, Brazilian exports totaled 153 thousand tons last month, 8.1% more than in the same month of 2022. Last year, the country exported 2.11 million tons of rice, 85% more than in 2021. Cereal prices remain heated in the countryside and in supermarkets, mainly due to the off-season.
Production and consumption of beans are close to 3 million tons this year, with no margin for any climatic effect on the crop.
The record wheat harvest in Brazil gives relief to bread prices, which, although at a high level, rise less this month. Dollar and the international scenario, however, are fundamental for the evolution of the prices of this cereal.
Russia intensifies attacks on Ukraine, which interferes with Ukrainian exports and may even make it difficult to renew the foreign sales agreement signed by the two countries. A new rise in international wheat prices would give impetus to Brazilian exports, which in January reached 562,000 tons, the second highest volume in the month of January.
The price of milk, which had been on a downward trend, stopped the slowdown, due to lower uptake. January prices still exceed those of the same month of 2022 by 14%, according to Cepea (Center for Advanced Studies in Applied Economics). Beef was 1% cheaper in the last 30 days, pork fell 0.6%, and chicken, 5%, according to Fipe.
Internal costs and the exchange rate may define prices in the coming months. The corn crop, an essential item in the composition of the feed, has prospects for a record volume, but there are already signs of a possible loss of ideal planting time, which could affect productivity. The planting of corn takes place in the same area of cultivation of soybeans, whose harvest is delayed.
An acceleration of the dollar makes Brazilian proteins even more competitive abroad and paves the way for greater exports. January reached a record level in foreign sales of these proteins in this period of the year.
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