LEONARDO VIECELI
RIO DE JANEIRO, RJ (FOLHAPRESS)
The prices of the two ingredients that give rise to a traditional drink, coffee with milk, show a lull in Brazil.
The relief comes after the inflation of both products has put pressure on consumers’ pockets in recent years, according to data from the IPCA (Broad National Consumer Price Index).
In the 12 months up to August, long-life milk registered deflation (drop) of 25.2% in the country. This is the most intense reduction since August 2017 (-27.79%).
Ground coffee (powder), in turn, recorded deflation of 7.32% in the 12 months up to August. It is the biggest drop since January 2020 (-7.37%).
The IPCA data, which is released by IBGE (Brazilian Institute of Geography and Statistics), can be consulted in the Inflation Panel updated by Folha.
In July 2022, long-life milk increased by 66.46% in 12 months. Ground coffee inflation reached 67.53% in April last year.
Economists say that both ingredients became cheaper this year due to the expansion of product supply. The truce in the prices of inputs used in production would also have contributed to the drop in supermarket shelves.
“In the case of milk, livestock farmers need cattle feed made from soybeans and corn. With lower costs, the price of milk becomes better,” says economist André Braz, coordinator of the dairy’s price indexes. FGV Ibre (Brazilian Institute of Economics of the Getulio Vargas Foundation).
FRAMEWORK WORRIES MILK PRODUCERS
In addition to citing the relief in production costs, Braz states that the increase in milk imports increased supply in Brazil and lowered the item’s prices for consumers. This, however, could lead more producers to abandon the activity, considers the economist.
“If the supply is very large, the livestock farmer may have difficulty recovering his profit margins. Therefore, he may choose to process the milk (produce dairy products), and not make fresh milk available. It would be a reaction.”
Representatives of the sector are putting pressure on the federal government to adopt measures to curb imports in the industry. In their view, foreign purchases, especially from Mercosur, reduce profitability and especially put small producers in Brazil at risk.
From January to August this year, imports of milk, cream and dairy products (except butter and cheese) rose 154.5% in volume compared to the same period in 2022, according to data from the federal government’s Comex Stat platform.
“The price of milk should be increasing now, in the off-season, if it weren’t for the impact of imports”, says economist Jackson Bittencourt, coordinator of the economic sciences course at PUC-PR (Pontifical Catholic University of Paraná).
“The drop is good news for those who eat breakfast, but there is concern for producers”, he adds.
According to the professor, the sector is closely associated with small rural establishments in Brazil, while in countries like Argentina there is a greater presence of large livestock farmers. “They can have lower production costs. They have economies of scale.”
In August, consumers paid R$4.90 for a liter of UHT milk, on average, in the city of São Paulo. The value represents a drop of 24.5% compared to the same month in 2022, when the average price was R$6.49.
The data comes from the basic food basket researched by Procon-SP in agreement with Dieese (Inter-Union Department of Statistics and Socioeconomic Studies).
Over the past year, which saw climate problems in producing regions of the country, milk actually cost more than a liter of gasoline, as Folha showed at the time.
COFFEE HAS BIGGER HARVEST
Also according to research released by Procon-SP, powdered coffee has also become cheaper for consumers in the capital of São Paulo.
In August, a 500-gram package cost R$14.37, on average. The reduction was 6.38% compared to the same month in 2022, when the price was R$15.35 in the city.
The truce occurs in a scenario of productive expansion. In 2023, the Brazilian coffee harvest should reach 54.36 million bags, according to an estimate from Conab (National Supply Company).
The projected volume would represent a growth of 6.8% compared to 2022, despite this year being a negative biennial for the crop, which traditionally means a smaller harvest.
“Coffee had a good harvest, the weather helped. In 2021, for example, we went through a bad period, with frosts during the coffee plantations’ maturation period, which was a shock,” says Braz, from FGV Ibre.
“With the increase in supply, the price has now fallen”, adds the economist, who does not foresee significant increases in the product’s prices in the coming months.
Bittencourt, from PUC-PR, assesses that the coffee shortage in recent years has made it difficult for the population to consume it. This, says the professor, also had an impact on prices. “With the increase in supply and the drop in demand, prices really fall,” he points out.
In 2022, coffee consumption fell by 1% in Brazil, according to data released in March by Abic (Brazilian Coffee Industry Association).
In the IPCA, ground coffee should close 2023 with an accumulated drop of 8.07% until December, indicate projections by economist Fábio Romão, from LCA Consultores.
The predicted rate would mean more intense deflation than the low of 7.32% recorded until August. In 2022, ground coffee registered an increase of 13.51% in Brazil.
For long-life milk in the IPCA, Romão predicts a drop of 5.33% in 12 months until December 2023. It is a less intense reduction than that seen until August this year, of 25.2%.
According to the economist, the drop should be smaller due to the effects of the comparison basis. This is because strong monthly reductions were recorded at the end of 2022, which will be removed from the 12-month calculation until December 2023. Even with these falls, long-life milk ended last year with an accumulated increase of 26.18%.
In 12 months, soluble coffee still accumulates an increase in the IPCA. The variation was 3.89% until August 2023. The increase, however, was greater a year earlier. It was at 24.8% until August 2022.
The post Coffee with milk becomes cheaper and relieves consumers after the spike appeared first in Jornal de Brasília.
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