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The spiralling cost of a morning brew is stirring discontent in Brazil as rising grocery bills in the world’s largest coffee-growing nation eat into the popularity of leftist President Luiz Inácio Lula da Silva.
In a supermarket in the megacity of São Paulo, 49 year-old driver Claudio said he was “astonished” by the R$145 ($25) tag on a one-kilo packet. “I blame the government,” he added. “Basic household items should not be that expensive.”
Coffee prices have jumped globally because of extreme weather linked to climate change, but the increase of almost 40 per cent in Latin America’s biggest economy last year has become symbolic of broader unhappiness over food and drink inflation that has weighed on Lula’s approval ratings.
Viral videos on TikTok joke about hiding the coffee flask when guests arrive, in reference to the national custom of offering a cup to visitors.
The average Brazilian drank 2.2 per cent less coffee in the year to October, according to an industry association.
The wider issue has cast a shadow over Lula’s prospects for re-election in 2026. For the first time since the 79-year-old’s return to office in 2023, more people disapproved of the job he was doing than approved, according to a survey by Quaest last month.
“The price of food has risen rapidly and voters see their incomes are not keeping up,” said Felipe Nunes, director at the pollster. “The problem has become more widespread.”
It is a sensitive topic for a politician who promised “beer and steak” during his election campaign, before narrowly defeating hard-right incumbent Jair Bolsonaro.
The cost of a basic grocery basket climbed 14.2 per cent last year, including a 25 per cent rise in the price of cuts of beef, said the Brazilian supermarket association. Overall food and drinks inflation was 7.7 per cent, according to official figures.
Zeca Dirceu, a lawmaker with Lula’s Workers’ party, said: “Every government faces setbacks during this phase. All the economic figures are favourable to Lula . . . What is really hurting Lula’s popularity is fake news.” “The magic of Lula’s charisma with the population is a fact,” Dirceu added.
Having alleviated poverty by boosting welfare payments during his first two terms between 2003 and 2011, Lula vowed to improve stagnant living standards again by expanding the state.
GDP grew by a robust 2.9 per cent in 2023 and an estimated 3.8 per cent last year, while unemployment is its lowest since current records began in 2012.
But voters have given Lula little credit. “Recent experience shows it’s not enough to improve general economic indicators, because the population doesn’t eat GDP,” said Nunes.
A Datafolha poll last week gave the Lula government 24 per cent approval, the lowest in any of his three periods in office, with drops among key voter groups like those on low incomes.
Political scientists drew comparisons with former US president Joe Biden, another ageing leader whose ratings suffered from rises in the cost of living.
Lula supporters note that last year’s 4.8 per cent rise in consumer prices — above an official target ceiling of 4.5 per cent — was below the spell of double-digit increases recorded under Bolsonaro in the wake of the coronavirus pandemic, and a far cry from the hyperinflation of Brazil’s past.
But economists forecast a further inflation increase in 2025, and critics argue excessive state spending is a critical factor. Investor worries about fiscal policy drove down the Brazilian real last year.
Finance minister Fernando Haddad this week played down concerns, saying inflation between 4 per cent and 5 per cent was “relatively normal” for the country and that a recent currency appreciation would stabilise prices.
“For inflation to come down, the pace of economic growth needs to slow substantially,” said Fernanda Guardado, chief Latin America economist at BNP Paribas. “A cut in government spending would help.”
The central bank has responded by raising interest rates to 13.25 per cent. Analysts say there are early signs of deceleration.
“Brazil is likely heading towards stagflation,” wrote UBS economists this week, referring to the combination of no growth and stubborn inflation.
Lula this month drew derision by suggesting shoppers boycott expensive supermarket products to drive down prices. Rightwing congressman Nikolas Ferreira mockingly crowed, “if you’re hungry, just don’t eat” in a widely shared social media video that concluded: “If the president is bad, just get rid of him.”
To reverse the slide, Brasília is betting on measures including an income tax exemption for lower earners and giveaways of cooking gas and medicines for the poorest households.
Meanwhile, hard-up Brazilians such as 70-year-old retiree Adilson are switching to cheaper coffee blends. “For people on the minimum wage, it’s not affordable,” he said.
