Colombia’s peso bonds fell, pushing yields to a four-month high, on concern dry weather will fuel inflation as food prices rise.
The yield on Colombia’s 11% benchmark bonds due in July 2020 jumped 12 basis points, or 0.12 percentage point, to 8.97% at 11:47 AM in New York, according to Colombia’s stock exchange. It earlier touched 9%, the highest since Sept. 25. The bond’s price fell 0.876 centavo to 113.306 centavos per peso.
“Inflation perspectives aren’t good,” said Daniel Velandia, head analyst at Bogota-based brokerage Ultrabursatiles SA. “Not only are gasoline and beer prices rising but the report on higher food prices is generating a lot of noise in the market.”
A lack of rainfall has led to a loss of crops, sending food prices up 2.15% last month, compared with a 0.21% decline in December and a 0.27% increase in January 2009, Colombia’s Agriculture Ministry said yesterday.
SABMiller Plc’s Colombia unit, Bavaria, said last month it will increase beer prices after the government announced it would more than triple the sales tax on the beverage. The Energy Ministry announced an increase in gasoline prices in January.
Colombia’s consumer prices rose 0.59% in January after climbing 0.08% in December, according to the median forecast of 23 economists in a Bloomberg survey. The national statistics agency is slated to release the monthly inflation report Feb. 5.
The Colombian peso rose 0.4% to 1,960.80 per U.S. dollar from 1,968.13 yesterday.
(Andrea Jaramillo, Bloomberg)