Rice, Milk and Corn Next Inflation Victims

We recently wrote about how beans, a staple among Brazilians, have been affected by inflation causing the legume to be sold at never before seen prices. Now, economists and agribusiness market specialists believe that rice, milk and corn prices could rise in a similar fashion.

Changes in weather are believed to be the main culprit. In particular, the irregular distribution of rain this year harmed the production of rice and corn.

As far as rice is concerned, storms in April in Rio Grande do Sul, the largest producer of rice in the country, caused a drop of 15% in production. Consequently, prices rose 5.21% through June, according to the Brazilian Institute of Geography and Statistics (IBGE). Prices are expected to continue to climb through the beginning of 2017.

Specialists believe that the problems with corn, and subsequently milk, are structural problems and thus more concerning. Prices of corn rose 13% through June. Milk prices rose 18% during the same time period.

One of the reasons for the higher prices in corn is that the country decided several years back to start exporting it in large quantities. High demand and prices abroad eventually caught up to the domestic market.

Read more at Supermercado Modern (in Portuguese) Rice, corn and milk prices rise