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| Brazil cuts tariffs on imported food to zero |
| Brazilia, 11.03.2025 |
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| Brazil is cutting tariffs on food imports to zero as food prices, despite a slight slowdown in January, have risen sharply in the past three months, by more than 7%. Such a pace has not been recorded since the beginning of 2023. TASR reports this based on a Reuters report.
The agricultural commodity price index, compiled by the Brazilian central bank, points to the possibility of food inflation accelerating to around 15% in the coming months, which could increase the overall inflation rate by another 1.5 percentage points.
Previously, the Brazilian government seemed relatively tolerant of higher inflation, as its main drivers were the prices of services linked to a robust labor market and consumer spending.
But the prospect of a sharp rise in food prices, which could significantly reduce household purchasing power, has raised concerns, especially at a time when Brazil’s economy is showing signs of slowing and the government’s popularity is declining.
In addition to eliminating food tariffs, the government has also increased quotas for duty-free palm oil imports. These measures are intended to cushion the impact of potential reciprocal US tariffs.
Despite these efforts, analysts at Capital Economics have expressed skepticism about the effectiveness of zero tariffs in curbing food price increases. They argue that Brazil is a major producer and net exporter of many food products, and domestic factors are likely to continue to influence local prices. This is particularly true for coffee and beef, which have seen their prices rise sharply due to weather conditions that have affected harvests and pastures.
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