Soaring Prices Make Brazilian Government Announce Bean Imports

06/23/2016 - 11h10

There is a shortage of beans in the land of soybeans. And the reasons for that are obvious. A hectare planted with beans yields 997 kilos. In the same area, 3,000 kilos of soybean can be produced.

The consequence is soaring prices: one kilo of beans, which used to cost between R$ 8 (US$ 2.2) and R$ 12 (US$ 3.3) in supermarkets two weeks ago, is now sold between R$ 14 (US$ 3.8) and R$ 18 (US$ 5), depending on the type and amount of beans.

In 12 months the price hike of Pinto beans, the country's most popular variety, amounting to 70% of the domestic demand, reached 58.6%. Pinto beans became one of the main factors in the current inflation pressure in Brazil.

To try to reduce the price, Interim President Michel Temer announced on Wednesday, June 22, that the country will increase its purchase of beans from three Mercosur countries: Argentina, Paraguay and Bolivia.

The area for bean crops in the first harvest was 9% smaller than that of the previous year. The second harvest - which is ongoing - and the third will have even smaller areas.

Climate problems are yet another factor to contribute to the reduction in crop areas, which will make this year's bean production reach less than 3 million tons. In normal years, the average consumption is 3.5 million tons.

As imports are unlikely to produce efficient results, the market will have to adjust by lowering its demand, says Vlamir Brandalizze, an analyst at Brandalizze Consulting. As beans become scare, imports are affected and prices increase, the national consumption this year is likely to decline and reduce the pressure on prices.

Translated by THOMAS MUELLO

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