Brazil’s grain and oilseeds crop will shrink by 9.8 percent in 2016 against the previous year, the biggest year-on-year decline since 1996, the Brazilian Census Bureau (IBGE) said Tuesday. The crop will weigh in at 189 million metric tons, down more than 20 million tons from 2015. Dry weather in key growing areas is the main reason for the decline. Crop losses will make it more difficult for Brazil’s government to fight down inflation, currently running at 8.8 percent per year. Mid-year is normally a period of stable food prices because of Brazil’s typically large grain crop. However, this year has seen rising prices for many food products. The smaller crop could also cut into Brazil’s second-half exports.
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