Rising bread, meat and dairy put pressure on April inflation

The rise in prices in April did not stop despite controls, regulations and official measures to curb it. Inflation in March (6.7%) was the highest in 20 years, driven by food, rising 7.2%, that is, above average. Consultants see a slight slowdown in the average index for this month (between 5.3 and 5.7%), but “Inflation of food eaten at home will increase to 6.3% monthly”, says an Eco Go survey.

Food and drinks will accumulate an increase of almost 25% in the first 4 months of the year and it was the second category, after education, that rose the most over the period. Eco Go recorded that the products with the largest increases were fruit (38.6%), poultry (33%), flour derivatives (32.5%), vegetables (31.2%) and meat (23.7%). The dynamics are such that consultants predict that inflation in 2022 is approaching 70%.

The most corrosive are the most basic consumer products. “It’s more expensive now to be vegetarian. Last year, beef rose 58% and fruits and vegetables, 89%“, says Damián Di Pace, director of Focus Market, ironically. It is influenced by both seasonal ingredients (in the case of fresh food) and the Russian invasion of Ukraine, which triggered international wheat prices and corn.

Guido Lorenzo, from LCG, pointed out that so far in April, “baked products, cereals, pasta and other flour derivatives, including meat, have led the increase.”

Certainly to counter the international price increase, at the beginning of March, the Government raised withholdings on soybean meal and oil by 2% and biodiesel by 1%, to resolve a trust to subsidize internal consumption of flour. Until yesterday it was still not implemented. From the Secretary of Commerce, led by Roberto Feletti, they justified the delays: “The technical issue is very complex, but it will take effect in the next few days,” they said. Clarion.

Connoisseurs agree that price increases, although widespread, are gradually slowing down. “More than half of the increases in April were due to statistical drag“, clarifies Sebastián Menescaldi, economist at Eco Go. This does not make the concern less. Because almost all weekly surveys of consultants indicate that in the third week of the month (the former) recorded sharp increase in major food categories.

According to an LCG report, on average from last month to last week, the ranking of increases was dominated by meat (7.1%) and dairy products and eggs (7%).

Behind are baked goods, cereals and pasta (6.3%), beverages (5.5%), vegetables (4.6%), fruits (4.5%) and lard (4.3%). Such data comes from surveying 8,000 product categories in large supermarket chains. That deserves an explanation.

It happens that hypermarkets are focused on almost all controlled basket programs, including Preservation Prices and fresh food. Despite this, Lorenzo insisted, “we saw an increase in the speed of redialing listings last week“.

That doesn’t necessarily affect agreements with the Ministry of Commerce, whose prices you adjust per quarter below average inflation. The difference is that in stores and local independent stores, “until the third week of April they accumulated an increase of 6.5%“, completes Di Pace.

In neighborhood stores, the expert says, beef (12%), poultry (14%) and milk (10%) are the main drivers of “food inflation”. Di Pace also agrees that food and drink should slow down in the second half, but allows himself to give projections. “It is very difficult, because there are many uncertain variables: the future of economic policy, the war in Ukraine, the dollar,” he listed.

Menescaldi believes the excessive warming of prices in March and April should be temporary, but it has introduced an additional factor in joint negotiations with unions. He pointed out that the agreement signed with Commerce (59.5%) is a way to validate expectations of a 60% floor for inflation in 2022.