Consumers may see a reduction in food prices in 2022, says Conab director

Food prices may be friendlier to Brazilian consumers throughout 2022, but this will depend on some international factors, such as Chinese demand, as well as internal issues, such as the appreciation of the real and increased production.

This is the opinion of Sérgio De Zen, executive director of Agricultural Policy at Conab (National Supply Company) and doctor professor at ESALQ-USP, who spoke to CNN this Wednesday (8).

One of the factors is already well underway, the increase in national production. Agribusiness has hit record exports in 2021 so far, moving US$ 102 billion between January and October, according to a report by the National Confederation of Agriculture and Livestock (CNA).

He sees Brazil “entering a very promising year”, with the prospect of strong growth in the production of soy, corn and animal protein.

“For 2022, the perspective is for a harvest of 289 million tons, growth close to 19% compared to the previous harvest, already pricing bad weather and normal adversities”, he evaluates.

“Consumers will start to see a reduction in prices. If we have an exchange reversal, which is a very plausible scenario, it will benefit even more”, says de Zen. “We have a very optimistic perspective”, he adds.

He points out that the increase in the price of beef this year was directly related to the exchange rate devaluation, “and as protein has costs in dollars, it becomes more expensive at this time for those who buy in reais, but we currently have an increase in productivity that makes up for a part of that”, he explains.

China factor

The fact that China, the largest importer of Brazilian meat, is also committed to favoring the consumption of local production of animal protein, which is basically made up of pork meat, also weighs on the possibility of Brazilians seeing the friendlier price on the shelf.

“The (Chinese) government reduces beef imports so that it can migrate to pork and dry up the market,” explains De Zen.

But the reduction in demand for imported products in China should be punctual, with a subsequent resumption of imports. “From the moment it dries up (the pork market, China) imports should resume at the normal pace,” says the director.

There is also the possibility that the beef market could grow in China after a stabilization of the world economy, which could put more pressure on domestic prices.

Today, China consumes 6 kg per inhabitant per year of beef, against 24 in Europe and 26 in Brazil.

Brazilian income

Even though there is a growth in productivity in the field and international factors collaborate, there needs to be a strengthening of Brazilian income so that national production is directed to the domestic market, otherwise, the destination tends to continue to be abroad, explains De Zen.

“We know that distribution is not homogeneous and that this is a problem of income distribution, this cannot be solved by agriculture. It is necessary to separate the problem of production from the problem of income”, he emphasizes.

* Produced by Vinícius Tadeu, under the supervision of Elis Franco