Attacked already shows major food prices in 2018

Who got used to the low prices of food last year can prepare for higher values in 2018. Last year was marked by perfect weather, which generated a supersafra grain and good production of groceries. The weather may be good again this year, but some new factors will lead to the elevation. Wholesale prices are starting to show that uphill drive.
In July 2017, after a first half of fall, mainly of meat, IGP-FGV 10 indicated a deflation of 2.52 percent in the month. In 12 months, accumulated in the fall was 18.5%. This month, according to the latest data released by FGV, wholesale food prices rose 0.74 percent, four in a row. The accumulated in 12 months already have minor fall, of just 11.66%, according to the latest data.
João Paulo Bernardes Deleo, a researcher in the area of greenery of the Cepea (Center for advanced studies in applied economics), alert to the fact that the year 2017 has been good for consumers, but not to the producers, who have had a loss of income.
The result is that this year the producers, undercapitalized, have reduced the planting area. In addition, smaller investments are doing in crops.
This means that even with a favorable climate, consumers will pay more for groceries.
The Ceagesp, main center of São Paulo, supply is beginning to reflect these prices. At the beginning of the year, a kilo of tomatoes Italian type of best quality cost up to £ $3.02. This week's in R $4.75, a high of 55%.
The PGI-10, which indicated a 10% drop in prices of tomatoes in December, already 18% high points in January.
The high are not limited, however, the groceries. The price of cattle has been one of the main components of food wholesale pressure this month, according to the FGV.
Another product that enters this pressure list is corn, whose planting area this summer was the lowest in four decades (period in which Conab began disclosing the data of planting area). Corn prices behavior is still unclear, since the first estimates still indicate a production close to 90 million tons this year.
Current stocks are high, and the bet of a larger harvest falls on the off-season. Export estimates, however, are of a new record, which wipes the market. The volume and the price of corn are determinants for the meats, especially bird and swine.
Beans and rice have area and production forecasts lower, but prices have not yet reacted in this year, which may occur. The evolution of the economy is also an important component in food behavior. Can pull the demand and raise prices.