Food prices in April had the lowest rise in the last ten years for the month and contributed significantly to last month’s inflation below market expectations, according to the Brazilian Agriculture and Livestock Confederation (CNA). The entity issued a statement to analyze the behavior of the Broad Consumer Price Index (IPCA) of April, released by IBGE. The general IPCA was 0.22%, below the 0.28% projection made by the market, while food had inflation of 0.09%.
In April, agricultural products with the biggest declines were potato (-4.31%), due to the increase in supply, followed by crystal sugar (-2.8%), due to the increase in world production and harvest in Brazil, whole chicken (-2.08%), ground coffee (0.36%) and meat (0.31%).
In 12 months, the IPCA for food recorded a drop of 2.11%, driven by the home food group, where there are agricultural products, with a deflation of 4.68% in the period. On the other hand, the total increase of the IPCA in 12 months was 2.76%. With this scenario of inflation expectations below the government’s target for 2018, CNA estimates that there is room for another cut in the Selic interest rate, which is currently at 6.5%.