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Comment by randomdata | Hacker News Reader

> Nevertheless, we still need imported wheat. Ukraine war and dollar variations literary affect our bread.

This would happen imports or not. So long as wheat exports are allowed, the local price will settle on the world price as the product is able to flow to the highest bidder. An event like the Ukraine war will impact someone and that will drive the world price up.

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Only under a perfectly free market system. A great many countries have export controls in place specifically for wheat and other vital commodities. States can also set price ceilings and floors. The US, for instance, passed the temporary Wheat Price Guarantee Act during WWI.

Also, even a perfectly free market has shipping costs.

Brazil government runs a company called Conab that acts as a "buffer stock" for grains. It buys, stores and sells grains in large quantities in a continuos fashion, so the government can soften market fluctuations for those commodities over time.

That's fascinating. I've wondered for a while whether governments did that. Seems like a common sense precaution for preserving your country's food security.

In the latest 5-6 years the stock was basically zero-d. And the previous government even wanted to close CONAB. Now I believe they will return to stock commodity and stuff again, but there's a lot of pressure from agrobusiness to not stock again.

One of reason why food inflation in Brazil rise in the latest years is exactly because of CONAB stopped stocking it.

Even milk and peanut they stocked before.

That's interesting. It reads as a central bank of grains.

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