Oil and Super El Niño will put pressure on food prices in 2026, says Abras

Impacts of the conflict in the Middle East and climate change are expected to put pressure on food prices in the second half of the year, according to an assessment by Abras (Brazilian Association of Supermarkets), released this Wednesday (8)

According to Marcio Milan, vice president of the association, the war between the United States and Iran and the El Niño predicted for the end of the year could substantially increase the prices of basic items.

"This has consequences for the entire supply chain", he says.

Since the start of the conflict, in February 2026, Brent and WTI oil prices have soared, reaching US$120 in the first few weeks.

After four months of war, however, prices remain volatile in the face of uncertainty about the opening of the Strait of Hormuz, through which around a fifth of world oil exports pass.

This morning, with the confirmation of new attacks and sanctions between the two countries, after a failed attempt at an agreement, futures contracts advanced more than 5%, approaching US$80 per barrel and reinforcing the volatility highlighted by Milan.

Another factor of concern is El Niño, predicted for this second half of the year. "There is an expected warming for this year, greater than in 2025", he explained.

According to an analysis by CNN Money columnist Pedro Côrtes, in Brazil, El Niño affects four sensitive fronts of the economy, including food production.

This year, the forecast is that the phenomenon will reach 63% intensity. If confirmed, it will be among the most intense recorded since 1950.

Milan states that Abras will monitor the phenomenon closely, as the upward trend in prices, which is already intense, could worsen.

"If it materializes, El Niño should increase the prices of certain products, as we are already seeing with potatoes, tomatoes and onions", he explained.

According to data from Abrasmercado, an indicator that monitors the variation in prices of the consumer basket made up of 35 basic products, May registered an increase of 2.16%, raising the average value of the basket to R$854.91. Year-to-date, the increase is 6.82%.

Among the products that put the most pressure on prices, beans led the increases, with an increase of 6.44% in May, and 41.09% in the year to date. Next come rice (2.16% in the month) and long-life milk (0.77%)

Fruit and fruit also recorded significant increases, with emphasis on potatoes (44.69%), tomatoes (20.62%) and onions (16.80%) compared to the previous month. Year to date, increases reach 75.84%, 86.17% and 48.88%, respectively.

Regionally, the Northeast showed the biggest price variation, with an increase of 2.79%, taking the average value of the basket to R$772.51. Despite this, it continues to be the region with the cheapest basic food basket in the country. The highest cost was recorded in the North, where the basket reached R$ 939.79, after an increase of 1.88%.

Despite food inflation, Brazilian family consumption continued to grow. Compared to the same period last year, the May 2026 index registered growth of 3.93%.

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Compared to April, the indicator increased 2.23%, while, year-to-date, the increase is 2.47%. Abras' projection is that 2026 will end with growth of 3.2%.

According to Milan, the data also reflects the good situation in the job market.

Family income also played an important role in the entity's assessment.

In the last month, batches of Income Tax refunds were paid, the anticipation of the 13th salary, Bolsa Família, PIS/Pasep benefits and late INSS payments were paid, significantly increasing the monthly income of part of the population, which may have boosted consumption.

"In a scenario of high interest rates and consumers more attentive to prices, this income predictability helps preserve families' supply throughout the month", explains the vice-president.

According to him, May also had a relevant seasonal factor: Mother's Day. The date contributed to an increase of approximately 9.5% in consumption during the commemorative week of 2026, compared to the same period in 2025.

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Source: CNN