Brazil to stock up on food citing inflation concerns

Brazil has a chronic storage deficit
calendar icon 16 June 2023
clock icon 2 minute read

Top food producer Brazil will start stocking up on food staples, a government agency said on Thursday, as the leftist administration of President Luiz Inacio Lula da Silva makes good on last year's campaign trail promise to curb food inflation, reported Reuters.

In a bid to increase public storage capacity, food supply and statistics agency Conab announced a 34% rise in fees it will pay for government-accredited warehouse operators, the first increase in six years.

The policy marks a sharp reversal from the previous government's stance, which never deemed stocking up on food as an option.

"We will go back to making public stocks, which is essential to fight food inflation," Conab President Edegar Pretto said in a statement. "For that, we first need to expand Conab's accredited network."

Conab said details of the new policy, including budget allocation, food purchase mechanisms and the staples involved will be announced by the agriculture ministry at a later date.

Pretto said Conab's own warehouses, as well as those of accredited third parties, will be involved in the effort.

The new policy comes at time when many countries worry about the impact on consumers of high food costs.

In France, the government secured a pledge from 75 food companies to cut prices on hundreds of products. In the UK, the government ditched plans to ask supermarkets to impose a voluntary price cap on basic goods after a backlash from retailers.

In general, food stockpiling is more common in nations where food production is insufficient.

Brazil is a large producer and exporter of soybeans, corn, coffee, sugar, chicken and beef but has a chronic storage deficit.

Brazil's summer grain production in 2023 outgrew its storage capacity for the time in 20 years.

Historically, the government buys grains such as corn when prices reach a certain minimum threshold.

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