Brazil’s Conab plans to enhance food stocks to counter rising inflation, changing procurement regulations to allow for more flexible grain purchases. This marks a policy shift reflecting ongoing struggles with inflation management. Recent measures, including reduced import tariffs, have been deemed insufficient by analysts as public concern for rising prices grows.
The Brazilian National Supply Company, Conab, is taking measures to increase food stocks to combat rising food inflation. Edegar Pretto, the head of Conab, announced plans to revise procurement contract regulations, which currently benefit farmers during low price periods. Pretto noted that current grain prices often do not meet the minimum thresholds established by these rules, complicating the procurement process.
This initiative reflects a departure from former government policies, demonstrating the administration’s struggle to manage inflation levels. To address this issue, Conab is discussing updates to its procurement guidelines. Pretto emphasized the need for more flexible regulations, stating, “The rules serve to protect farmers’ income and not to build up stocks.”
Brazil recently reduced import tariffs on select food items in an effort to mitigate rising food costs, yet analysts have deemed this measure largely ineffective. President Luiz Inacio Lula da Silva faces declining public support as citizens grow increasingly alarmed by escalating consumer prices. Food and beverage prices have risen nearly 8% in 2024, while January alone saw a rise of nearly 1% for the fifth straight month.
In a bid to replenish food stocks, Conab may allocate an additional 350 million reais ($60.4 million) this year for purchasing 445,000 metric tons of grains, including corn, rice, and beans. Presently, 189 million reais has already been earmarked for this initiative, as confirmed by Conab.
In summary, Brazil’s strategy to enhance food stocks through Conab marks a significant policy shift aimed at combating inflation. The proposed revisions to procurement contracts indicate a responsive approach to the challenges of rising food prices. However, the effectiveness of such measures continues to be scrutinized amidst increasing public concern over inflation and consumer prices.
Original Source: www.tradingview.com
