July 4, 2008

Brazil promises not to restrict food exports amid rising inflation

The Brazilian government would not be restricting food exports to curb food price inflation nationwide, the Agriculture Minister told the local Estado newswire Thursday (July 3, 2008).

Food price inflation is pushing up national inflation above the Central Bank's target of 4.5 percent by year's end. Twelve-month running inflation is currently around 5.8 percent, due mostly to high food commodities.

Agriculture Minister, Reinhold Stephanes, rejected the idea of following in Argentina's footsteps by banning exports to check inflation at home.

"Any artificial measure you adopt, like Argentina adopted and Mexico tried to do, ends up causing problems in the mid and long-term," he told Estado.

"Brazil has done this before and it didn't work out right," he said.

The government announced its 2008-09 crop credit line on Wednesday, up 15 percent for commercial farmers to 65 billion Brazilian reals (US$40.6 billion).