(Bloomberg) --
Brazilian consumers are also paying the price for the swine flu outbreak in Asia, as Chinese demand for protein pushes up the cost of meat in Latin America’s largest economy.
Even as overall inflation remains low, there’s been a sharp rise in the cost of beef, pork and chicken -- up 8.1% month-on-month in November. As a result many Brazilians will have to cut back on their barbecues this Christmas.
“We’ll have to do something with rice, I guess,” Renata Ziller, a teacher and mother of three, said in a supermarket in Brasilia. “I’ll have to use some creativity because the prices are so high.”
Alongside the increased demand for Brazilian meat from China, a prolonged drought has impacted the quality of cattle pasture, helping to drive up prices. With barbecued meat at the center of most Brazilians’ diets -- and many of their social events -- its rising cost has political as well as economic implications.
Political Weapon
When the leftist former president Luiz Inacio Lula da Silva left jail in early November, he told supporters that he would continue to fight for the right for the Brazilian worker to “hold family gatherings, have a barbecue, and drink a little beer, which is what makes us happy.”
A few weeks later President Jair Bolsonaro publicly acknowledged the problem on his Facebook Live broadcast.
“People are complaining, rightly, that the price of meat has gone up,” he said. “The world has started to buy more meat from us. Unfortunately that’s what happens.” As a supporter of the free market, he added, he wasn’t able to do anything about it.
While 12-month inflation is running at just 3.27%, meat is rapidly becoming prohibitively expensive. The price of a chicken rose by over 8% in the same period; pork’s up almost 15% and a filet mignon is around 20% more expensive than it was one year ago.
Read more: Food Inflation Rears Its Head in Chile and Brazil in November
In November, meat was the product with the biggest impact on overall headline inflation on the month, according to the national statistics agency.
“Inflation in general ought to be a positive factor for the government, however this current rise in a product that is so dear to the average Brazilian could favor the opposition narrative,” Rafael Cortez, from the consultancy Tendencias Consultoria, said. “We are already starting to see this on social media.”
For Geovana Santos, a 20-year-old trash collector with a one-year old daughter, the cost of her weekly meat purchase has doubled, meaning she’s now had to change her diet.
“Basically I just have to buy sausage, because it’s cheaper,” she said.
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