Tomatoes, onions, and other vegetables and food products have risen over the last year. There are climatic reasons (drought, rains) and agricultural reasons (less area planted), but what are the bigger economic forces at play?
I don’t think there are other bigger economic forces acting here, since demand for those items is pretty much stable. As you mentioned, there was a supply shock caused mainly by climatic reasons (heavy rains in the Southeast, a severe drought in the Northeast), and since arbitrage is not possible for several products (there’s no international market, at least not a liquid one where players can hedge or speculate), prices skyrocketed. Curiously, the prices of exchange listed agricultural commodities have been falling consistently since last September, so if there’s any external factor in foodstuff items it should lead to lower domestic prices.
O resto está aqui.