IBRE indicates that prices of dairy products are pulling inflation, but they may decrease

Those who usually go to the grocery store must be astonished by the price increase of dairy products. For the accumulated data in 12 months - i.e. from November 2012 until October 2013 - dairy products increased 20.67%.
Institutional
07 November 2013

Those who usually go to the grocery store must be astonished by the price increase of dairy products. For the accumulated data in 12 months - i.e. from November 2012 until October 2013 - dairy products increased 20.67%, almost four times more than the accumulated inflation for the same period, which recorded 5.36% according to the Consumer Price Index (IPC/FGV).

Long-life milk, which comprises almost 1% of the family budget, became 25% more expensive in 2013, until October. In the list of items, mozzarella cheese, queijo prato (Brazilian soft cheese, similar to the Danish cheese), milk powder, minas cheese and yogurt also suffered significant increases, and the lower increases were recorded for ice cream, butter, parmesan cheese and condensed milk.

According to André Braz, economist of the Brazilian Institute of Economics (FGV/IBRE), this is due to the fact that at the end of winter pasture conditions deteriorate due to the droughts, but he believes that this increase will diminish soon. With the arrival of summer the volume of rainfall increases, the conditions of pasture improve and so does the milk offer. From now on, the consumer will notice a decrease in the price of the product and its derivatives, he explains.

The economist also imputes the rising prices of the products to the increase in animal feed prices derived from soybean and wheat. In 2013, the price of grains reflected the exchange rate devaluation and certain pessimism regarding the North American harvest, he says.

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