Agriculture falls 2.8% in the 2nd quarter and is the sector with the biggest drop in GDP

Agriculture fell 2.8% in the 2nd quarter of 2021 compared to the first three months of the year. It was the biggest drop among the sectors and one of the factors contributing to the 0.1% fall in the gross domestic product (GDP). The GDP is the sum of all goods and services produced in the country and during a certain period and serves as a kind of thermometer for the evolution of activity and the capacity of an economy to generate wealth and income.

Data released this Wednesday (Sept. 1) by the Brazilian Institute of Geography and Statistics (IBGE) show that the industrial sector retracted 0.2% and services rose 0.7%.

“Agriculture was negative because the coffee harvest was included in the calculation. This played an important role in the second quarter. The coffee harvest is in a negative biennial, which results in a significant retraction in production”, explains the coordinator of national accounts at IBGE, Rebeca Palis.

See the chart below for a history of Brazilian coffee exports by quarter since 2019. Data are from DataLiner:

Brazilian Coffee Exports by Quarter | Jan 2019 to Jun 2021 | TEU

Source: DataLiner (To request a DataLiner demo click here)

The drop in production was also influenced by the strong drought in the main coffee-producing regions, such as Minas Gerais, São Paulo, and Espírito Santo. The lack of rain interfered with plant flowering and, later, with grain development.

Despite the negative result compared to the first months of the year, the agricultural GDP grew 1.3% compared to the same period in 2020.

In addition, when adding the results of the last four quarters, the sector increased by 2% compared to the four consecutive prior quarters.

The advance compared to last year was driven by the positive performance of some products from the soy (+9.8%) and rice (+4.1%) crops. On the other hand, there were decreases in the estimates of the annual production of coffee (-21.0%), cotton (-16.6%), and corn (-11.3%) crops

Source: G1

To read the full original article, visit the link:

https://g1.globo.com/economia/agronegocios/noticia/2021/09/01/agropecuaria-cai-28percent-no-2o-trimestre-e-e-o-setor-com-maior-queda-no-pib.ghtml

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