Food prices have the biggest drop in July since 2010, after a sequence of increases in the IPCA-15

The reduction is the largest for the months of July in 16 years, that is, since 2010 (-1.55%). When comparing different months, the drop is the most intense in almost two years, since August 2024 (-1.3%).

For analysts, the drop is mainly explained by seasonal issues. Food supply tends to increase during this period due to better weather conditions for field production, compared to the beginning of the year. More supply tends to translate into lower prices.

According to economist Fábio Romão, from the consultancy 4intelligence, there is also an effect of the basis of comparison.

As food prices rose sharply throughout the first half of 2026, there is now a "return" in the form of intense falls.

In IPCA-15, food at home marked three consecutive months with advances above 1% - March, April and May.

"There is a lot of seasonality in this drop in food, but let's remember that some fresh [items] had very important increases. So, the return is being very intense", says Romão.

According to him, the cost of food may also have been alleviated by the recent decline in diesel oil prices. Fuel fell 1.32% in July. It was the third consecutive drop.

This year, however, fuel still accumulates an increase of 15.18%, under the effect of the spike in oil prices at the start of the war in Iran.

"Right now we are making use of a more regular supply of food and, therefore, lower prices", says economist André Braz, from FGV Ibre (Brazilian Institute of Economics of the Getulio Vargas Foundation).

According to the IPCA-15, the price of tomatoes fell 19.95% in July. It was the main downward impact on the IBGE index (-0.07 percentage points). Potatoes (-0.03 p.p.) came next, with a reduction of 10.03% this month. Despite the monthly drop, both products still record double-digit increases in 2026. Tomatoes accumulated an increase of 63.17% until July, and potatoes, 80.12%.

EL NIÑO BRINGS RISKS

For the coming months, analysts draw attention to the risks of El Niño. The climate phenomenon challenges agribusiness because it affects temperatures and the distribution of rainfall between regions.

As a Folha report showed, the situation could delay the planting of grains, reduce the quantity and quality of crops and make livestock farming difficult. These episodes could put pressure on food prices.

"There is an El Niño on the way, with many warnings of it being an outlier effect, of being stronger, and this could seriously compromise our next harvests", says Braz.

For Romão, from 4intelligence, the possible impact of the climate phenomenon tends to appear in retail prices from the last quarter of this year and the beginning of 2027.

He also sees the possibility of meat prices rising by the end of the year due to supply issues associated with the livestock cycle. This would reverse the recent downward movement.

In July, meat fell 0.34% in the IPCA-15. "The recent drop in live cattle ends up affecting meat and is partly linked to the decline in Chinese purchases", says Romão.