March 3, 2011

Brazil's CPI rises as meat consumption increases

Brazil's consumer price index rose by 5.91% in 2010 due to the increase in domestic meat consumption, and the resulting redirection of product to the domestic market away from export.

Higher real incomes, especially for the middle class, which accounts for more than 100 million Brazilian consumers (Valor Econômico), cause the rise in domestic purchasing power.

Although average beef prices have risen more than 70% from June 2010 to January 2011, average consumption continued to be stable as consumers absorbed the rise. However, the lift in protein demand meant consumption of lower priced chicken rose 10% to 44kg/head per annum in 2010. Despite being a more affordable option, improved demand for chicken has reduced its price differential in contrast to dearer beef.