Agriculture brings USD 122.07 bn to Brazilian economy from Jan to Sept

The Brazilian agribusiness sector has had another positive year. Despite not having entered any new important market and the 112% increase in the prices of intermediate goods like fertilizers and pesticides, the agribusiness surplus grew to USD 38.6 billion from the USD 29.2 billion recorded from January to September 2021. The 2% drop in volume was offset by price, which rose 37.%% from January to September. The share of agribusiness in Brazil’s total exports is 23%.

Many variables have contributed to the current unraveling scenario: the performance of China’s economy – a market that receives almost 40% of Brazilian agricultural exports, whether or not there will be a recession in Europe – which absorbs a third of grains and meats produced in the country, and the impact of inflation in the United States – which consumer another 16% of Brazilian agricultural exports. “The continuity of the commodity growth depends largely on whether or not there will be supply shocks that sustain the high prices,” says Lia Valls, associate researcher at the Brazilian Institute of Economics at the Getúlio Vargas Foundation (FGV Ibre).

Experts at consultancy TCP Partners project that demand will remain strong over the next twelve months. They point to the unfolding of the conflict in Ukraine, the recovery of China’s GDP, the real devaluation, and the calibration in the international price of chemical inputs for agribusiness. But there are caveats. “Agribusiness may see a drop in profit margins because of spending on fertilizers, stocked with high prices, and the higher cost of capital, with the Selic interest rate at around 13% to 14%, despite favorable credit line,” says Ricardo Jacomassi, chief economist and partner at TCP.

Brazilian agribusiness as a whole brought USD 122.07 billion to Brazil’s economy from January to September – a 30% increase over 2021. The data is from the National Association of Cereal Exporters (Anec). Cereal exports brought USD 60.32 billion.

Industry representatives are optimistic, albeit wary of the uncertainties. “Harvest yields can offset the higher cost of farming. All we can export is being exported, and the only reason we are not exporting even more soybeans is because of the crop failure this year,” says Sérgio Mendes, general director of Anec.

The output of soybeans, soybean meal, soy oil, corn, and wheat totaled 116.8 million tonnes, up from 105.8 million tonnes in the first nine months of last year. Soybeans saw a 10% drop in export volume and had China as their primary destination. Indonesia was the largest buyer of soybean meal, and Iran was the largest buyer of corn, doubling exports. India was the leading importer of Brazilian wheat until September of this year, when sales to the international market nearly quadrupled compared to the same period in 2021.

“Purchases are decreasing across the productive chain because of the energy issue in Europe. In addition, inflation and the possibility of recession can affect the demand for raw materials in the textile sector,” says Miguel Faus, president of the National Association of Corn Exporters (Anea). Siscomex recorded cotton exports of USD 2.27 billion this year through September, compared to USD 2.28 billion in 2021.

Beef exports increased 18.5% in volume from January to September this year compared to the first nine months of 2021. Revenue growth exceeded 40%, with US$ 9.18 billion, according to the Brazilian Protein Association Animal (ABPA). Revenue from chicken meat exports from January to September 2022 was US$ 7.37 billion – up 31% – while pork meat fell by 10.2% over the same period in 2021.

Source: Valor Econômico

To read the full original article, please go to: https://valor.globo.com/publicacoes/suplementos/noticia/2022/10/28/com-alta-dos-precos-agropecuaria-exporta-30-mais-em-2022.ghtml

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