Brazil's Tomato War

Brazil has a tomato problem. In recent weeks, the price of tomatoes has skyrocketed, making it as expensive as meat and chicken in some cases.

In supermarkets in parts of São Paulo state, Brazil's second-largest tomato producer, the price of tomatoes rose by 346 percent, from R$1.90 to R$8.49 per kilo. Wholesale prices there have also risen above 330 percent. In states like Mato Grosso do Sul and Pernambuco, prices spiked above 200 percent. In Goiás, the country's largest tomato producer, tomato prices hit an all-time high of 150 percent in April.

Nationwide, tomato prices increased 17 percent in the last week alone. Prices went up 70 percent from January to March, and rose a total of 150 percent in the last 12 months.

For an international comparison: At my local grocery store in New York, vine tomatoes are on sale for $1.97 per pound, or about R$8.61 per kilo. In São Paulo, vine tomatoes at Pão de Açucar are selling for R$14.39 per kilo--67 percent more than in New York. Even in Alaska, tomatoes cost less than in some Brazilian cities.

A number of factors are at play. Areas of tomato cultivation were reduced nationwide, in part due to heavy rains in the South and a record drought in the Northeast. There was also overproduction of tomatoes last year, which led to fewer areas of cultivation this year. In total, the area covered by tomato fields fell 16 percent in Brazil; in Goiás, by nearly 42 percent. The result of falling supply? Higher prices.

On the agricultural side, there were other factors. Some crops were hit by diseases. Agricultural labor doesn't come cheap. Small-scale farmers are often unable to invest in high-tech equipment, opting to pay for workers instead. Another theory is that the lack of policies to guarantee a minimum price based on production costs has also had an influence. Then there are the overall economic causes. High production costs, as well as high price of diesel, contribute. There's also the "Brazil cost," which includes expensive transportation costs and high taxes. 

The price spike has led to jokes in the media and on the internet, spawning political cartoons such as a robber demanding tomatoes instead of a wallet, and a woman complaining that tomatoes are too expensive to throw at politicians. It's inspired Facebook memes, showing TV host Silvio Santos giving away tomatoes as a prize, an engagement ring made with tomatoes, and an image of a robber saying: "ATMs are over with. The game's in boxes of tomatoes now."

Some people are simply cutting back on tomato purchases. But others, like an Italian restaurant in São Paulo is fighting back and "declaring war" on tomatoes. Nello's Cantina and Pizzaria announced on Facebook earlier this week that it would stop buying tomatoes and serving dishes using tomatoes until the price goes down--a fairly extreme decision for an Italian restaurant. Today, though, the restaurant posted a video showing owners negotiating 25 boxes of tomatoes at a wholesale market. (Incidentally, this is the same restaurant that, like several other upscale restaurants in São Paulo in recent memory, saw armed thieves invade the premises and rob 60 customers about a year ago.)

Some say prices will come down soon, though it's not likely to come down to previous lows. Other vegetables, like onions and carrots, have also become more expensive, hitting the highest prices in 14 years. Is this just a price flux? Or is this a sign of more inflation to come--which could have a bigger impact ahead of next year's election? We'll have to see. For now, Brazilians may just have to cut back on salad.

**Updated 4/6 with additional info on Alaska prices, corrected tomato cost per real in NYC.

Comments

[PTRio]

When I saw the price of tomato's at the ZonaSul supermarket recently, I thought, "how absurd" and checked to see what the price was in Anchorage, Alaska, for comparison. Per kilo, tomato's in Anchorage cost 60% less. Anchorage gets tomato's from airplanes or greenhouses. And still still they are cheaper than in Brasil?

The simple answer is to stop buying tomato's while the price is high. Lower demand should help bring prices down. But, obviously, it isn't that simple.

[JT]

Great writing and reasearch! I believe the math is a bit off when comparing NY vs. SP prices, though. 1 kg = 2.2 lbs; which would bring NY tomatoes price to approximately R$ 8.80 / kg

[Rio Gringa]

Thanks guys! I added this Alaska detail, and updated the corrected conversion to kilos.

[Tom]

Nice article, thanks.

This may be of interest.

http://www.amazon.com/Tomatoland-Industrial-Agriculture-Destroyed-Alluring/dp/1449423450/ref=sr_1_1?ie=UTF8&qid=1366491248&sr=8-1&keywords=tomatoland