Brazil's Bold Boost in Grain Reserves to Tackle Inflation

Brazilian crop agency Conab aims to modify procurement rules to increase grain reserves and combat food inflation. The changes seek to provide more flexibility for government purchasing, contrasting with past policies focused on farmer protection. Rising food prices have impacted public sentiment and government popularity.

Brazilian crop agency Conab is gearing up to enhance grain stockpiles amid escalating food inflation. In an announcement made on Monday, agency head Edegar Pretto stated the need to revise existing procurement contracts to better address current challenges.

The policy shift highlights governmental efforts to manage inflation through increased grain purchases at lower prices, contrasting with previous policies aimed mainly at safeguarding farmers' incomes.

This adjustment comes as Brazil grapples with a public increasingly alarmed by rising consumer costs, leading to a decline in government approval. Food prices, which spiked by 8% in 2024, continue to climb, prompting further financial commitments to bulk up reserves.

(With inputs from agencies.)