IPEA: supply restriction and greater demand should keep agricultural prices high

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The supply restrictions caused by climate problems and the increase in domestic and international demand are expected to keep the prices of agricultural products at high levels. The behavior of the exchange rate in the coming months will also determine the possible increase in food prices. The assessment is from the Institute of Applied Economic Research (Ipea), in the Conjuncture Letter published on Thursday, 19. Considering the average values ​​practiced in the first half of 2021 compared to the first half of 2020, there was an increase in prices in all the products surveyed, except potatoes. Grains stood out, with increases of more than 40% in all items: soy (78%), corn (77%), wheat (40%), cotton (75%) and rice (55%). the important negative impact of this increase on production costs in livestock is highlighted, which may negatively influence the supply of proteins in the country. of prices in the short and medium term”, wrote Ana Cecília Kreter, associate researcher at the Directorate of Macroeconomic Studies and Policies at IPEA. to play a decisive role in the formation of prices for these foods. “The intensity of this possible price increase also depends closely on the behavior of the exchange rate in the coming months and on international prices,” added Cecília Kreter, in the document. recalls that the most exported commodities by Brazil maintained heated demand worldwide in the first half of 2021 and international prices were higher than in the same period of the previous year: grains, meats and coffee. “In the case of grains, this increase in international prices is a reflection of the tight balance between production and consumption in the current crop, added to stocks that had been declining in recent crops. For meat, what is observed is a movement of substitution between animal proteins, either for sanitary reasons or for the search for cheaper proteins”, justified the letter from Ipea. Only rice registered a reduction in international prices in the first half of 2021 compared to 2020, a drop of 11%. The hikes occurred in soybean (65.9%), corn (72.3%), wheat (24.4%), cotton (38.1%), live cattle (18.3%), lean pig (65, 3%) and chicken meat (24.2%). The IPEA study had the collaboration of the Center for Advanced Studies in Applied Economics of the Luiz de Queiroz School of Agriculture of the University of São Paulo (Cepea/Esalq/USP) for the analysis of domestic prices and the National Supply Company (Conab) for production information and domestic supply and demand balances.Do you want to achieve consistency in the stock market once and for all? Watch the workshop “The 4 Secrets of the Black Belt Trader” with Ariane Campolim for free.

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