Flour mills absorb increases in wheat and the exchange rate, keeping prices in check and importing less

From bread to pasta in general, there is a 10% average variation in price increases in recent months in Brazil. Could be more. Or it could be much more, depending on each industry.

The Brazilian wheat industry association (ABITRIGO) guarantees that the associated flour companies are absorbing the explosion in wheat prices.

“They are not passing on the increased prices, but rather are reducing their margins,” stated the president of the association.

With wheat prices consistently rising since the beginning of the year, and above US$ 7 since July – US$ 7.70 a bushel on Friday, November 5, in Chicago – and which reached the high point for the year on Tuesday (almost US$8), there would be no support to practice the highs in flour prices.

As inflation spreads to all items, certainly there would be an intense substitution of wheat products.

Rubens Barbosa does not attribute the industries’ ability to keep prices in check to advance purchases fixed at the lowest prices, despite the dollar having been at high levels for a long time.

For a net importing sector, with more than 4.8 million tons imported from January to September, the 2.71% decline compared to the same months in 2020 shows that industries also had to stop buying abroad.

For the president of Abitrigo, “with the high dollar, the price pressure of the mills is at its limit, since wheat represents approximately 70% of the costs”.

Source: Money Times

To read the full original article, visit the link:

https://www.moneytimes.com.br/farinheiras-absorvem-altas-do-trigo-e-cambio-represando-precos-e-importando-menos/

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