Brazil Slashes Food Import Taxes to Combat Rising Inflation
Brazil’s government announced Thursday the elimination of import taxes on essential food products including sugar, coffee, corn and beef.
Vice President Geraldo Alckmin revealed these measures following meetings with industry representatives and cabinet members. The initiative aims to tackle food inflation, which has eroded President Luiz Inácio Lula da Silva’s popularity.
Food prices in Brazil rose by 7.69% in 2024, considerably higher than the country’s overall inflation rate of 4.83%. The situation has worsened recently, with inflation climbing to 4.96% by mid-February 2025.
Brazilian households feel the pinch even more severely, as “food at home” prices increased by 8.23% last year. The government will zero import duties on several products beyond staples.
Pasta, biscuits, olive oil, sunflower oil, and sardines will also become tax-free. Officials will raise the import quota for palm oil to 150,000 metric tons as part of the comprehensive approach.
“We reduce import taxes to help lower prices. We’re not replacing domestic production, we’re complementing it,” Alckmin emphasized during the announcement. The Brazilian real’s weakness contributes significantly to rising costs.
Brazil Faces Economic Pressure
The currency has depreciated 15.85% against the dollar over the past year. This devaluation increases prices for imported goods and production inputs throughout the supply chain.
Severe droughts linked to El Niño have damaged harvests in agricultural regions. These climate disruptions particularly affect fresh produce prices, putting additional pressure on family budgets.
President Lula identified affordable food as a major priority earlier this year. “We need cheap food on workers’ tables, because food has been pricey,” he stated in January. His approval rating has fallen to 24%, the lowest level during his three presidential terms.
Industry representatives show mixed reactions to these interventions. The Sugar Industry Union called the measures “natural and appropriate,” noting sugar prices decreased 10% last month.
The government has also requested states eliminate their ICMS tax on basic food items. The measures will take effect within days, pending approval from Brazil’s trade body.
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This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief