The rise in commodity prices in international markets is canceling out the benefits that the appreciation of the real could bring to the fall in inflation and the price of food and fuel this year.
Overall, the balance still weighs in favor of inflation. In other words, the increase in the price of these products abroad exceeds the improvement in the exchange rate in Brazil this year.
In addition, the assessment prevails that the trend for the real until the end of the year is to devaluation, while commodity prices tend to remain at high levels. Therefore, inflation projections for 2022 continue to deteriorate.
The commercial dollar closed this Wednesday (23) sold at R$ 5.003. It is the lowest price for the US currency since June 30, 2021.
The real is the currency that has appreciated the most this year among the largest economies, but it is still one of the most depreciated since 2020.
In the case of oil, the data show a tie in the variations in February, but an inflationary effect since the beginning of the year.
Therefore, the price of gasoline in Brazilian refineries continues to lag around 10% in relation to the value on the US Stock Exchange, according to a calculation by Banco Original.
That is, based only on the price criterion, Petrobras would have no reason to reduce the value of the fuel at this moment, even with the appreciation of the real.
Petrobras adopts a policy of parity of prices for oil products in the domestic market in relation to international values, which also considers factors such as the exchange rate.
Daniel Xavier, coordinator of the Economic Department at Banco ABC Brasil, calculates that in 2022 the net result of a rise in commodities and a fall in the dollar is still inflationary.
The 8.1% exchange rate appreciation observed so far tends to remove around 0.9 percentage point from the IPCA (the country’s official inflation index) in four quarters. The 24% appreciation of Brent oil has an inflationary impact of 1.6 points in the same period. The 10% increase in the price of agricultural commodities in dollars adds 0.2 point to the inflation index. The 0.4% rise in metallic commodities has practically zero effect.
The sum of these impacts estimated so far on the IPCA is 0.9 point upwards over the four-quarter horizon, according to the economist, who projects inflation of 5.7% this year.
According to him, in recent weeks the dollar has lost strength against the real, which in a way “compensated” the pressure that comes from the barrel of oil at the moment. But the scenario can change.
“The Focus consensus for the 2022 IPCA, currently at 5.56%, tends to be revised upwards. Mainly due to the more unfavorable outlook for the price of oil, which is the commodity with the greatest marginal impact on inflation domestic market and continues to be marked by geopolitical uncertainties at the beginning of the year.”
The chief economist at Banco Original, Marco Caruso, says that since the last meeting of the Central Bank’s Copom (Monetary Policy Committee) at the beginning of the month, both the real and the barrel of oil have appreciated by around 8%. .
At the time, the BC adopted an exchange rate of R$5.45 (average of previous weeks), and the barrel was at the level of US$89. Now, the values ​​are around R$5.00 and US$97, respectively.
He says that the benefit of the exchange rate for inflation may be less than estimated, as exchange rate devaluations exert much more upward pressure on the IPCA than appreciations exert downward pressure on inflation.
If a 10% upward variation in the dollar puts around 1 point in the IPCA, as estimated by the Central Bank, a fall of the same magnitude takes away only 0.30 point from inflation, says the economist.
Caruso calculates an effective reduction in the price index of just 0.25 percentage point for an 8% appreciation in the Brazilian currency. His IPCA projection of 5.8% for this year, however, considers an exchange rate of R$ 5.85 at the end of December.
“It is easier to raise prices in a currency devaluation than to reduce in an eventual appreciation”, says Caruso. “If I were the BC, I wouldn’t give a big weight to the exchange rate to eventually signal an earlier break in the Selic rise.”
​Rodrigo Leão, technical coordinator of Ineep (Institute for Strategic Studies of Petroleum, Natural Gas and Biofuels), says that the dollar and oil have had variations of practically the same magnitude since the last adjustment by Petrobras.
For him, it would be necessary to bring the dollar to close to R$ 4.00 so that a reduction in fuel prices in Brazil based on the criterion of price parity would be technically justifiable.
According to Leão, while the market projects a rise in the dollar this year, expectations for oil are for the price to remain at a high level.
“We have a very unstable external scenario because of Russia and Ukraine. At best, we will have a price [do barril] at the level it is now. I don’t think it’s going to get any lower.”
This does not mean that fuels will necessarily go up this year. He claims that political issues related to the election in Brazil could contribute to a rise in the dollar, but would also put pressure on Petrobras not to make further readjustments.
Asked about ten days ago about further adjustments in fuel prices, given the tension between Russians and Ukrainians, the president of Petrobras, reserve general Joaquim Silva e Luna, said he was “following what is happening”.
The state-owned company made its last adjustment on January 11, 8% in diesel prices at refineries, while gasoline sold to distributors had an average high of 4.85%.
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