(Bloomberg) -- Brazil’s Luiz Inacio Lula da Silva has weathered financial crises, corruption scandals and even a coup attempt. But now it’s the soaring cost of food that’s posing the biggest hazard for his presidency.

Galloping price hikes of staples like beef, coffee and eggs are enraging citizens and dragging the president’s job rating to record-low levels. And it could sink further, as data released Wednesday showed little sign that inflation is abating.

Consumer prices surged 1.31% in February, the biggest monthly gain in three years, the national statistics agency reported. Annual inflation soared well past the top of the central bank’s tolerance range, with food and beverage costs spiking 7%, the biggest year-on-year rise among all categories surveyed.

At a time when the public’s tolerance of setbacks and policy failings is vanishing, inflation is proving to be political kyrptonite. The sting of rising grocery bills is particularly potent in Brazil, a deeply unequal nation where the leftist leader known as Lula returned to power on a promise to make the basics — “barbecue and beer” — accessible again to regular citizens.

Two years into his latest term, new polls show many voters believe they’re worse off.

In February, Lula’s approval rating fell to nearly 46%, while his disapproval rating rose to 53%, according to LatAm Pulse, a survey conducted by AtlasIntel for Bloomberg News. His ratings were even worse among Brazil’s lowest earners, households that make 2,000 reais ($344) a month or less, with nearly 55% saying they disapprove of the president.

Annual inflation accelerated to 5.06% that month, above the central bank’s 3% target. Food cost pressures continued to build, with beef up nearly 22% on the year, ground coffee spiking 66% and eggs and climbing 10%.

The data “points to a structural erosion in his base of support,” said Andrei Roman, who heads AtlasIntel. “Increasingly Lula is losing the support of the lower middle class and even of the poorer segments of the Brazilian population.”

The rising cost of living is forcing shoppers like Simone Inacio, a 52-year-old teacher in Sao Vicente, a city in the state of Sao Paulo, to cut back on activities and non-essential items.

“You can put off buying clothes, shoes, or even going to the movies, but you can’t stop going to the supermarket and buying groceries,” she said. “Every day our ability to buy things shrinks.”

Food Imports

Faced with what’s sure to be a tough reelection fight next year, Lula is rushing to alleviate consumers’ pain. Like governments around the world that are undertaking emergency measures, the 79-year-old has called meetings with suppliers to discuss prices and also slashed import duties on food.

Last month, Japan said it would sell hundreds of thousands of tons of rice from its emergency stockpiles, while the Philippines declared a food security emergency to bring down costs of the grain. Hungary also announced plans to impose profit curbs on retailers in a bid to contain food inflation, while the US Department of Justice is probing sellers over elevated egg prices.

Investors are particularly sensitive to measures undertaken in Brazil, which dealt with its own bout of hyperinflation in the early 1990s and now faces a particularly complex set of problems, such concerns over government spending and rapidly rising debt. The central bank plans to deliver its third-straight interest rate hike of a full percentage point next week.

What Bloomberg Economics Says

“Barring a sharp currency appreciation or much faster economic slowdown, we expect price gains to come in above target throughout 2025. And with inflation expectations resilient, that’ll keep the central bank busy. We forecast a 100-basis-point interest-rate hike at next week’s meeting and further tightening over the second quarter before policymakers go on hold for the rest of the year.”

— Adriana Dupita, Brazil and Argentina economist

Last year in particular was a disaster for food prices, said Andre Braz, an economist at the Fundacao Getulio Vargas in Rio de Janeiro, who cited a dry spell, a strong labor market and a rout in Brazil’s currency. Accumulated food inflation from 2020 through February stands at over 52%, compared to roughly 35% for overall consumer-price gains, according to data compiled by Bloomberg.

Rising wages and near-record low unemployment had served to soften the blow from price hikes, but “the cushion is getting thinner and thiner,” Braz said.

The government’s response so far is underwhelming analysts. Slashing tariffs on imported food is unlikely to lower prices significantly in Brazil, an agricultural powerhouse that grows much of what it consumes.

Jose Carlos Hausknecht, a partner at MB Agro, a consultancy in Sao Paulo, said local woes have been exacerbated by global demand for the products Brazil sells abroad. The Latin American nation is the world’s top exporter of chicken and beef, and shipments of those proteins hit a record last year.

That hunger is causing a chain reaction among many popular products, Hausknecht said. As meat costs spike, there’s a “substitution effect” with price-sensitive shoppers trading down for cheaper animal proteins like eggs, thus pressuring the cost of those items, too.

Not Optimistic

All of this is leaving Lula with few options in the short term. Economists say other policies being contemplated by the government, including increasing loans for growers, could take months to have any effect.

It’s all too little, too late for many of the president’s one-time supporters, like Hiago Kauan de Jesus.

The 26-year-old event producer said he cast his vote for Lula in 2022 because he thought the leftist leader had the poor in mind. But now he says he’s grown skeptical, as the higher cost of living forces him to find alternatives to food products like olive oil.

“Maybe in the long run, we’ll see some progress,” he said. “But I don’t feel optimistic.”

--With assistance from Giovanna Serafim, Simone Iglesias and Meg Lopes.

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