Brazil: Agricultural Prices Stoke Inflation
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Brazil's consumer inflation has been steadily rising over the summer and into the fall. The increase has, in large part, been fueled by spiking food and beverage prices. Basic staples such as rice, beans, and soy cooking oil rose the most in percentage terms. With the start of the COVID-19 pandemic, consumer demand rose on the back of increasing consumption at home, as well as a new tendency to stock up on basic food staples. However, an important factor contributing to Brazil’s food inflation is Brazil's role as a key global supplier of agricultural commodities and food products. Brazil's 2020 agricultural export boom has created scarcity and higher prices on the domestic market. Although Brazil eliminated import tariffs on rice, corn, soybeans, soy oil and meal, food inflation is unlikely to subside for several more months until the 2020/21 grain and oilseed harvests begin to come online.
