Climate crisis affects supermarket food prices

Experts point out that climate change affects the price of the main foods consumed by Brazilian citizens. COP30 is an opportunity to find solutions to the scenario that tends to worsen, facing inflationary impacts that will be increasingly intense

By Thayara Martins | thayara.martins@presidencia.gov.br 

Liane Caroline dos Santos, 30, works as a sales clerk at a variety store in Brasilia, Brasil. In her opinion, food inflation has been uncommon. “You go to the supermarket to buy something, spend a fortune, and come back with a small bag in your hand with very little in it. Coffee, meat, rice, and many other things that people need to eat every day have gone up,” she said. The young worker has started buying different brands and saving as much as she can to keep her family’s bills up to date. “For a worker who earns a minimum wage, pays rent, and buys groceries, there is nothing left over. You really have to save.”

According to Fernando Gonçalves, Price Index Manager at the Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatística/IBGE), the overall inflation rate in Brazil was 4.83% in 2024, and 7.69% for food and beverages. In 2023, the National Consumer Price Index (Índice Nacional de Preços ao Consumidor/IPCA) was 4.62%

“In 2024, different weather conditions contributed to the rise in food prices. At the beginning of the year, there was a more intense El Niño event and, in April, heavy rains in Rio Grande do Sul, an important food-producing state. In the second half of the year, there were heatwaves and severe drought in many parts of the country,” explained Gonçalves. He also added that, in addition to weather issues, other factors can influence food prices — such as the price of food commodities on the international market and exchange rates.

Droughts and the price of coffee

According to Professor Gustavo Baptista from the Institute of Geosciences at the University of Brasília (Universidade de Brasília/UnB), 2024 was the hottest year on record, with temperatures 1.6 degrees above the pre-industrial average. In December, temperatures exceeded the threshold established by the Paris Agreement. Furthermore, January was already hotter than December, meaning that temperatures are increasingly breaking records.

Climate data has been gradually revealing that there is little water storage available underground, for example. As the temperature of the environment increases, the water stored in the soil and in plants evaporates, hindering land irrigation and plant hydration. This process harms food crops such as coffee and cocoa, raising their market prices. Baptista observed that, two years ago, an arroba (about 15 kg) of cocoa cost around BRL 200. Today, it costs almost a BRL 1,000. “Food must be supplied to the market but, at the same time, it is hard to produce it due to climate change. Many people deny these changes, but when we think about the economic aspect, we need to move quickly because the economy will collapse if people do not consume,” said Professor Gustavo Baptista. 

To the expert, COP30 (the United Nations Conference on Climate Change), which will take place in Belém do Pará in November, is emblematic, since it may discuss a review of the Paris Agreement after 10 years — as certain aspects that were agreed upon then were not fulfilled. 

“It will be an extremely important and representative moment, because the event will be held in the largest equatorial forest in the world. We cannot forget that the planet has already gone through five major extinctions, but in none of them the agent responsible for the extinction was the same one that became extinct. We are our own meteorite. So either we take action and make these discussions happen or we are headed towards a very complicated situation,” he pointed out. 

The professor advocates for the creation of alternatives and investment in technologies to produce more efficiently and generate income for people. According to Baptista, there is no point in trying to reverse the deforestation process without creating a way for individuals to survive. For example: instead of having 1 hectare for cattle production and clearing it to install pasture, the ideal would be to promote Agroforestry Systems [Sistemas Agroflorestais/SAFs]. 

He explains that, in these systems, producers are encouraged to plant coffee, açaí, cocoa, bananas, and cassava, and thus generate financial resources, agricultural commodities, product availability and, consequently, a reduction in food prices. However, there is a need for more active government intervention in this process.

The new reality cannot be denied

Guilherme Mello, secretary of Economic Policy at the Brazilian Ministry of Finance (Ministério da Fazenda/MF) agrees that adapting to the new reality requires investment, new technologies, and financing instruments to encourage an ecological transformation. Mello mentioned several government programs in Brasil — such as Eco Invest, that aims to attract foreign investment to finance sustainable development projects, as well as investments in mitigation and adaptation to climate change within the Safra Plan [Plano Safra]; renewable energy projects; and the strengthening of the Climate Fund [Fundo Clima] to offer financing at lower interest rates. 

According to the Secretary, the states must be prepared to adapt and create adequate instruments to guarantee food and water security. It is also important that rural producers understand this new reality and prepare for it. “If I am a rural producer living in an area facing recurrent droughts, I must invest in an irrigation system and in improving the quality of my soil. This is what will guarantee a certain protection, a certain resilience against climate change. It is up to the government to ensure that producers invest cheaply to adapt their properties. Denying this new reality will certainly not help the producer, the consumer, or the country.”

The Secretary believes that COP30 will be a very important meeting where the world will be able to discuss the most efficient ways to face this process, and to minimize the losses that are already underway due to climate change.

All bets on COP30

Ana Toni, executive director of COP30 and national secretary for Climate Change at the Ministry of the Environment and Climate Change (Ministério do Meio Ambiente e Mudança do Clima/MMA),  highlights that the consequences of climate change for inflation were calculated by the European Central Bank (ECB) in 2023. ECB researchers estimated, using climate models and empirical evidence for 121 countries, that, in the absence of large-scale adaptation measures, future warming will cause global increases in annual food inflation between 0.92 and 3.23 percentage points per year — and, in total, inflation of 0.32 to 1.18 percentage points per year until 2035, with more relevant impacts on countries in the Global South. “In 2025, Brasil will have the opportunity, at COP30 in Belém, to continue the important debate that began at the G20, because there is one thing we already know: unfortunately, the climate situation is likely to worsen over the coming years, and its inflationary impacts will be increasingly intense, with significant distributional consequences.”

Ana Toni argues that, to face this challenge, COP30 must mark the beginning of a new decade of climate action, focused on implementing the commitments made since the Paris Agreement in 2015. Moreover, it must align financing flows and policy with the goal of limiting global warming to 1.5ºC.