Food Inflation Rears Its Head in Chile and Brazil in November
Comment of the Day

December 06 2019

Commentary by Eoin Treacy

Food Inflation Rears Its Head in Chile and Brazil in November

This article by Mario Sergio Lima and John Quigley for Bloomberg may be of interest to subscribers. Here is a section:

In Brazil, the inflation pick-up comes as economists and company executives sound the alarm on rising meat prices due to dwindling supply. China, the world’s top meat consumer, doubled pork imports and shipped in 63% more beef in October than a year earlier as the country struggles to ease shortages due to African swine fever.

“The food price shock has arrived” in Brazil, said Leonardo Costa, an economist at Rosenberg Associados. “We’re increasing our 2019 inflation call to 4% because the increase in food and
beverage costs will be even stronger in December.”

Eoin Treacy's view

If inflation is rising, and this appears to be a global phenomenon that will reduce the ability of central banks to continue to cut interest rates. That was certainly a factor in the RBI’s decision to hold rates steady in India today and similar decisions are likely across emerging markets as the full impact of higher food prices rolls through.

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