Food industry sees prices pressured by external demand and high costs

The food industry sees prices pressured at the beginning of 2022 with the heated external demand and the cost pressure that affects the sector, said this Tuesday (15) the executive president of Abia (Brazilian Association of the Food Industry), João Dornellas.

“In this beginning of the year, the pressure continues. The global market remains heated, and the costs, pressured”, said the leader in a press conference.

In Dornellas’ view, what can mitigate consumer inflation is the more positive outlook for the crop in 2022, even with the record of adverse weather events at the start of this year. Among the current risks are the drought in the South region and the effects of heavy rains in the Southeast and Northeast states.

“If the harvest is very good, it will help to control the pressure on food”, projected Dornellas.

Brazilian grain production in the 2021/2022 harvest is estimated at 268.2 million tons, according to data released on the 10th by Conab (Companhia Nacional de Abastecimento).

The volume, if confirmed, will represent a 5% growth compared to last season (2020/2021), or about 12.8 million tons more. Conab, however, has already indicated that the negative effects of the weather at the beginning of the year have reduced the projection – the forecast high in January was 12.5%.

This Tuesday, Abia announced that the production of the food industry grew 1.3% in 2021. Sales, in turn, advanced 3.2% in real terms last year. For 2022, a rise between 1.5% and 2% is expected.

Exports, which represent 26.5% of the sector’s revenue, increased by 18.6% in 2021, reaching a record level of US$ 45.2 billion.

The advance was driven by the recovery of the world economy, combined with the higher exchange rate, according to the entity. For 2022, Abia forecasts shipments between US$ 45 billion and US$ 46 billion.

The entity also pointed out that, in 2021, the number of workers employed in the food industry rose 1.2%, totaling 1.7 million. In practice, this means 21,000 new jobs.

According to Abia, food production became more expensive in the pandemic due to a combination of factors, which involves heated demand in the international market, advance in commodities and soaring prices for packaging.

“All this affects costs in Brazil and around the world,” said Dornellas.

In the health crisis, inflation and difficulties in the labor market led some Brazilians to seek more food donations and even food leftovers for daily sustenance.

This Tuesday, a monthly study by Ipea (Institute of Applied Economic Research) indicated that the inflation felt by the poorest was equivalent to almost double that observed among the richest in January 2022. very low was driven by the advance of food and beverage.