April 14, 2025 | 07:54 GMT +7

  • Click to copy
Wednesday- 14:48, 26/03/2025

Brazil faces inflation risks as surging corn prices eclipse rice plunge

(VAN) Corn prices in the Campinas region have surged past 90 reais ($15.80) per 60-kg bag, the highest nominal level in nearly three years, marking a more than 23% jump year-to-date, according to the widely followed Cepea index from the University of Sao Paulo.
A sign saying that credit card are accepted is seen on a corn vendor cart in a street in Sao Paulo, Brazil August 16, 2018. 

A sign saying that credit card are accepted is seen on a corn vendor cart in a street in Sao Paulo, Brazil August 16, 2018. 

Brazil is set to face inflationary pressure from rising corn prices, which could overshadow a sharp drop in rice, as President Luiz Inacio Lula da Silva's administration struggles to contain public discontent over high food inflation.

Corn prices in the Campinas region have surged past 90 reais ($15.80) per 60-kg bag, the highest nominal level in nearly three years, marking a more than 23% jump year-to-date, according to the widely followed Cepea index from the University of Sao Paulo.

That contrasts with paddy rice prices, which have dropped below 80 reais per 50-kg bag in Rio Grande do Sul for the first time since October 2022.

Rice prices have slumped due to an expected 15% rise in Brazilian production driven mainly by a recovery of Rio Grande do Sul's harvest, and improved global supply.

Conversely, corn prices have climbed amid low starting stocks, robust demand from the ethanol and meat industries, and the development of Brazil's second corn crop amid weather uncertainty.

"A major risk for food (inflation) is corn, the main input for poultry, pork, and cattle feed, including both meat and dairy production," consultancy Datagro said on Tuesday.

Datagro expects inflation to exceed the 3% official target with a 4.5% upper tolerance band, as food prices weigh on Lula's declining approval ratings.

The consultancy estimates corn's surge could push food inflation up by 1.07 percentage points over six months, with a broader impact on consumer prices of up to 0.47 percentage points.

A further drop in rice prices, the fifth most significant food item in Brazil's inflation index, could help ease inflation, but the cereal has already declined 3.99% over the past 12 months, economist Andre Braz of FGV IBRE noted.

Meanwhile, poultry, beef, and pork prices - which are all impacted by corn costs - have jumped 10.95%, 21.47%, and 20.22%, respectively, he stressed.

H.D

(Reuters)

China put steep tariffs on U.S. exports. Farmers are worried

China put steep tariffs on U.S. exports. Farmers are worried

(VAN) Tariffs are making life more expensive for John Pihl. He's been farming in Northern Illinois for more than 50 years.

New US tariffs spark alarm among EU and US farming groups

New US tariffs spark alarm among EU and US farming groups

(VAN) European and American farmer organisations are concerned about the import tariffs that the United States introduced on 9 April for products from the European Union. This makes them 20% more expensive.

Strong poultry markets with geopolitical risks

Strong poultry markets with geopolitical risks

(VAN) Global poultry trade is expected to remain strong amid relatively tight global protein supply and growing consumption, RaboResearch concludes in its latest animal protein report.

Big, biodiverse and beautiful: can Romania’s centuries-old giant haystacks survive modern farming?

Big, biodiverse and beautiful: can Romania’s centuries-old giant haystacks survive modern farming?

(VAN) Traditional methods benefit hundreds of species but as new agricultural techniques take over, the distinctive haystacks mark a vanishing way of life.

Banks see a dire climate future - and ways to profit

Banks see a dire climate future - and ways to profit

(VAN) The nation’s top banks are quietly advising their clients on how to build a financial life raft - or perhaps life yacht - from the wreckage of runaway climate change.

Conflict and rising food prices drive Congolese into one of the world's worst food crises

Conflict and rising food prices drive Congolese into one of the world's worst food crises

(VAN) From FAO Office in the Democratic Republic of the Congo.

Read more