The Brazilian government has announced that it will eliminate import tariffs on nine food items in an attempt to lower prices and control inflation in Brazil.
The list includes meat (current import tariff is 10.8%), coffee (9%), sugar (14%), corn (7.2%), olive oil (9%), sunflower oil (9%), sardines (32%), biscuits (16.2%), and pasta (14.4%).
Additionally, the import quota for palm oil, currently at 65,000 tonnes, has been increased to 150,000 tonnes.
This move, announced by vice-president Geraldo Alckmin, aims to increase competition and benefit consumers.
He believes the tariff cuts will not hurt domestic food producers, arguing that the imports will supplement, not compete with, local supply during this time of high food prices.
Alckmin emphasised that fluctuating prices are a normal market function, and the current market conditions necessitate tax reductions to benefit consumers.
Tariff Reductions
These tariff reductions will come into effect in the coming days, following approval by the Foreign Trade Chamber (Camex).
The government also plans to bolster the National Supply Company's (CONAB) food reserves, prioritise basic food items in the upcoming Harvest Plan through subsidised financing for domestic producers, and accelerate the animal product inspection system to speed up the availability of products like milk, honey, eggs, and meat.
The decision follows a meeting between President Lula da Silva, government ministers, and food industry representatives.
Food inflation has contributed to a decline in President Lula's approval rating, which has dipped to 24%, according to the latest Datafolha poll, the lowest level of his three presidential terms.
Brazil's 2024 inflation reached 4.83%, exceeding last year’s 4.62% and the central bank's target. This prompted interest rate hikes, currently at 13.25%.
