Brazilian agribusiness to earn USD 160 bln, while import costs rise to USD 50 bln

Agribusiness exports should make a record USD 160 billion this year, something that wasn’t fathomable a few years ago. This value represented an increase of 32% compared to 2021, when the numbers had already surprised the industry.

On the other hand, imports had never been so costly. Pressured by growing purchases and high international prices, purchases of agricultural inputs will reach USD 50 billion, up 51% YoY.

Such high export revenues began with the effects of the pandemic when countries increased their food stocks in anticipation of a disruption in the food supply.

Because of the importance of both countries in the supply of grains to the international market, Russia’s war with Ukraine boosted demand, causing commodity prices to rise again.

The pandemic and the war, while benefiting Brazilian producers with higher prices, boosted spending.

Russia, an important supplier of fertilizers, reduced the supply, and prices skyrocketed.

Brazil is well-positioned when it comes to food purchases. They represent 28% of total imports. Cereals, driven by wheat purchases, add up to the highest expenses.

The main Brazilian expense, however, comes from buying inputs, mainly fertilizers, and agrochemicals. Highly dependent on imported fertilizers, the country intensified purchases after the war.

Importers came to buy a volume of more than 4 million tonnes per month from May to July this year. In November, the volume retreated to 2.4 million.

Prices skyrocketed but are starting to retreat. Nevertheless, this change in the magnitude of international values brought new costs to Brazilian agriculture, which will still be present next year.

Brazilian spending on purchases of fertilizers rose to US$ 23.6 billion from January to November, well above the US$ 13.4 billion in the same period last year.

Under the new arrangement of the international market, Canada rose to the second position in the supply of fertilizers to Brazil. Russia remains in first place but with a lower value.

Despite an increase in purchases in the middle of the year, fertilizer imports, which have already reached 36 million tonnes, are expected to be lower than in 2021, according to Secex (Secretary of Foreign Trade) data.

The increase in spending on agricultural imports is also due to pesticide purchases. Imports totaled 640 thousand tonnes this year, worth US$ 6.5 billion. Volume increased by 58% last year while spending increased by 73%.

The performance of exports is owed to the soy complex, which is expected to generate US$ 59 billion in revenue this year. Meats have already produced 29% more up to November, totaling US$ 22 billion. Cereals reached US$ 12 billion in revenue this year, a 200% increase due to increased corn, wheat, and rice exports.

Brazilian agribusiness exports, which totaled US$101 billion in 2020, increased to US$121 billion last year and are expected to be close to US$160 billion this year.

Successive international crises have caused a slowdown in the world economy, and there are signs of a decline in global commodity prices.

Brazil must also prepare for increased protectionism and import barriers, mainly from the European Union. The bloc promises to impose new rules and requirements on imports of commodities, and Brazil will be one of the most affected.

Source: Compre Rural

To read the full original article, please go to: https://www.comprerural.com/exportacoes-do-agro-vao-a-us-160-bi-mas-importacoes-sobem-para-us-50-bi/

Sharing is caring!