Brazilian consumers will already begin to feel the effects of the war on breakfast prices in the coming days, according to the Brazilian Association of Biscuit, Pasta and Industrialized Bread & Cakes (Abimapi). A kilo of bread can reach R$20 in some cities.
According to the association, this should occur when industries buy new crops. Abimapi says that the surge in wheat prices is beginning to be felt by manufacturers in negotiations with suppliers, but there is still the delivery of flour committed in old contracts.
In view of the note released by Abimapi, in a conversation with the CNN, economist and professor at Ibmec Gilberto Braga notes that Brazilian consumers are already suffering the effects of the war in relation to the price of wheat-related items. Gilberto adds that, with the continuation of the conflict marked by Ukraine and Russia, it is possible that the prices of commodities will increase.
“Although it has not yet been captured in official research indicators, consumers perceive an increase of approximately 20% to 25% in the price of bread in bakeries and supermarkets. This already signals an increase in the price of wheat in the formulation of the product. The continuation of the war may still enact a period of new increases, but it is quite likely that this higher level will continue, at least until there is a prediction of when the conflict in Ukraine may end”, he adds.
The economist also evaluates the price of a kilo of bread located in bakeries in Rio de Janeiro. According to the professor, before the crisis, the value ranged from R$9 to R$12, but now the kilo is being sold between R$15 to R$20.
Russia is the world’s biggest wheat exporter and has been economically affected by the conflict with Ukraine., says Abimapi. Together, the two countries account for about 30% of world wheat exports.
The association explains that Brazil produces less than half of the wheat consumed and needs to import large amounts of the grain from countries such as Argentina, Canada and the United States. The increase in the price of wheat, for the Association, directly impacts production values for manufacturers of products such as cookies, pasta and cakes. AbimapiI emphasizes that, in pasta, on average, 70% of the cost is flour. In biscuits, the weight is 30%, and in industrialized breads and cakes, 60%.
Gilberto Braga points out that, although Brazil is not a direct buyer of the countries in conflict, it will have a high expense with the grain due to the high market demand.
“Brazil imported very little wheat from Russia, but it needs to continue buying in the market that was no longer established by Russia. So, with this factor, the price will rise and we have to pay more, which influences the price of domestic sales. This slips into the cost of bread, pasta and everything related to this commodity”, says the economist.
* Under supervision of Helena Vieira
Source: CNN Brasil
I am Sophia william, author of World Stock Market. I have a degree in journalism from the University of Missouri and I have worked as a reporter for several news websites. I have a passion for writing and informing people about the latest news and events happening in the world. I strive to be accurate and unbiased in my reporting, and I hope to provide readers with valuable information that they can use to make informed decisions.
