Rice becomes gold. Inflation is nothing new in Brazil. In the early 1990s, the country experienced devastating hyperinflation, reaching up to 80 percent a month. In 1986 then-President José Sarney created his own fiscal team, who controlled the prices in supermarkets.
After the adoption of the Real in 1994, those days seemed to be over. While Brazil has been through several economic crises before the one sparked by the Covid-19 pandemic – which will force Brazil’s GDP toward a -9.7 percent growth, according to the Brazilian Geography and Statistics Institute (IBGE) – the skyrocketing of food prices is unusual.
But it is really happening again. Brazil’s so-called National Amplified Consumer Price Index, or IPCA, rose 2.44 percent in 12 months, while food inflation rose by 8.83 percent over the same period. Among the most-consumed items, the prices of rice and cooking oil jumped the most –– by 19.2 percent and 18.6 percent, respectively.
Before the pandemic, a pack of rice cost around BRL 10 (less than USD 2). Now, some stores are selling the same pack for up to BRL 40 (USD 7.50). A huge increase in Brazil’s most loved (and, more importantly, payable) staple food item. As a result, Many Brazilians are appealing to Procon, Brazil’s consumer protection service.
Experts say that the currency disparity between BRL and USD and also the government’s emergency salary are the main reasons for the price increases. In the second case, it means that people who sell supplies saw in the Covid-19 aid an opportunity to increase their prices.
The government finds itself in hot water. President Bolsonaro once again endorsed his own words, saying that he was right to prioritize the economy instead of the isolation measures when the pandemic started. “I forgive those who said ‘stay home,” he even said to supporters. The leader also asked producers to keep a sale profit close to zero, but also promised that there won’t be any price-fixing.