Drought and high temperatures in the South will increase food prices, says Abag

The drought and high temperatures recorded in the southern region of the country will impact grain production – especially corn and soybeans – and this will cause food prices to rise.

This is the assessment of the executive director of the Brazilian Agribusiness Association, Eduardo Daher, in an interview with CNN Rádio. He explains that there is a “perfect storm” afoot, which started last year.

“We had an atypical year in 2021, with the pandemic, a frost that affected coffee and sugarcane in the Southeast, in addition to the water crisis and now these absurd temperatures.”

According to Daher, in Rio Grande do Sul, the estimate is for a loss of R$ 20 billion in grains and another R$ 24 billion in Paraná.

The executive director informed that CONAB (National Supply Company) reported that there has been a loss of 7 million tons of grain so far. “This is very serious, but even so, agribusiness was a tremendous success in 2021, with revenues exceeding R$ 1 trillion.”

The whole situation brings “built-in inflation”. “The commodity market, both international and national, have already identified these losses and a reduction in supply, with it, the natural consequence is that there is an increase in prices.”

“I hope this increase is not too big, but the problem, when you talk about grains like soy and corn, is that they are raw material for animal feed, it will impact the price of chicken, pork and beef.”

Eduardo Daher evaluates that “we are still in the middle of the storm” and it is not possible to predict with certainty the extent of the damage because of this.

“Let’s hope that São Pedro looks at it with care, on the weekend there should be a reversal of the picture, according to weather forecasts.”