Availability and inflation of food prices in Brazil due to internationalization of agriculture

Abstract

An exploratory analysis of the dynamics of prices and domestic per capita availability of food products from eighteen agricultural chains from Brazil was carried out, characterised at different levels of insertion in foreign trade between the years 2007 and 2019. It is assumed that domestic availability impacts the variation of domestic prices of agricultural products, being under the influence of the degree of trade openness. The analysis classified chains into four groups with different levels of importance in foreign trade: Exportable, Non-tradable, Low trade balance and Importable. The data used in this analysis was provided by the Instituto Brasileiro de Geografia e Estatística (IBGE) and the Sistema Integrado de Comércio Exterior (SISCOMEX). The results pointed out that, even in a period of growth in exports and international prices, the internal availability of the exportables group was not compromised, nor was it the group with the highest increase in consumer prices. On the other hand, the non-tradable and importable groups showed a drop in availability and an increase in average aggregate prices. Besides the dimensions analysed, it is not ruled out that the variations observed can be related to other factors not addressed in this study, such as the drop in per capita income and changes in consumption habits. Exchange and tax mechanisms to reduce the impact of the rise in international prices on domestic prices it is suggested to be analysed in addition to the adoption of public incentives for the production of rice, beans, cassava, fruits and vegetables.