The dollar’s rise following President Luiz Inácio Lula da Silva’s re-election is beginning to affect prices for Brazilian agricultural commodities, including soybeans, corn, sugar, wheat and coffee. The weaker real can benefit producers, but may also raise costs for consumers if higher commodity prices are passed on to food prices.

The dollar gained 9.2% in the week after the election and reached R$5.486 on Tuesday, its highest level since December 2025, according to the report. It opened lower on Wednesday, trading at R$5.475 at 9:48 a.m. Analysts cited market concerns about the direction of public finances during Lula’s fourth term as a factor behind the currency’s rise.

“Quanto mais tempo o dólar permanecer acima do pré-eleição, maior é a probabilidade de ter algum impacto nos preços”, said André Braz, an economist at FGV Ibre. Soybeans and corn can also affect meat production because they are used in animal feed.

The Center for Advanced Studies in Applied Economics (Cepea) said the stronger dollar made Brazilian soybeans more competitive internationally, drawing interest from overseas buyers and lifting prices. A 60-kilogram sack in Paraná was priced at R$152.45 on Tuesday, up 3.9% from October 23. Corn prices also rose: a 60-kilogram sack in the Campinas region cost R$66.19, 3% above its pre-election level.

Other factors could limit further increases, said Gabriel Viana, an analyst at Safras & Mercado. Soy planting is progressing in most regions, although heavy rain has affected parts of the South. Viana also warned that higher temperatures associated with El Niño could put crops under pressure later. Diesel prices are another concern because the fuel is an agricultural input; the government renewed its diesel subsidy for 30 days last week.

Sugar and wheat prices have also been affected. Cepea linked a stronger dollar to gains in spot prices for white crystal sugar in São Paulo. The average price from October 26 to 30 was R$128.57 per 50-kilogram sack, up 2.3% from the previous week and marking a 15th consecutive weekly increase. On Tuesday, a sack was priced at R$127.33, 1.5% above its October 23 level.

Wheat prices are being supported by limited supplies of good-quality grain after rain during the harvest, with the dollar’s rise adding pressure, Cepea said. The average price in Rio Grande do Sul, Brazil’s largest wheat-producing state, increased 2.2% in October.

The stronger dollar has also brought rice exports back into focus in Rio Grande do Sul, the country’s leading rice producer. Cepea said expectations of renewed external demand led some sellers to delay deals, while mills limited purchases amid weak sales and difficulty passing on the cost of raw materials. The state’s average rice price in October was the highest in nominal terms since February 2025.

Coffee prices in Brazil have remained firm despite declines in international markets, Cepea said, as the dollar supported domestic prices. On Tuesday, a 60-kilogram sack of robusta coffee cost R$975.32, up 4.1% from October 23. Arabica was priced at R$1,611.06, a 0.6% increase over the same period.

Sources: Folha Mercado.