Consultancy forecasts 7% drop in world agro exports in 2020 due to coronavirus

The consultancy Safras & Mercado predicts that agribusiness exports are expected to fall 7% this year, from R$ 96.78 billion in 2019 to R$90 billion in 2020. This will result from a reduction in cargo handling at ports and a slowdown in the world economy caused by the coronavirus. “In this scenario, the market is clearly at risk with a significant impact expected on Brazilian GDP, the agro and the gross value of the country’s agribusiness production, which is expected to drop 12% from the current R$ 683 billion to around R$ 600 billion, evaluates the consultancy in a report written by analyst Mauricio Muruci.

If the forecast is confirmed, the consultancy expects the agribusiness trade balance surplus to fall from R$83.13 in 2018 to R$79 billion in 2020, down 4.97%. According to the executive, “the initial estimate is that China’s GDP will grow only 3% in 2020, compared with previous estimates of between 6.5% and 6%. In the first quarter of 2020 alone, China’s GDP is expected to decline 9%. Afterwards international GDP should begin to grow again, but with growth forecasts to be revised downwards on net by between 1.5% and 3%, says Muruci.

As for sugarcane, the forecast is for a 6.5% drop in gross production value in the same period, with losses of R$1.25 billion in exports due to a 20% drop in shipments.  The consultancy expects there to be a 7% drop in exports of the commodity, from R$6.5 billion in 2019 to R$5 billion in 2020.

Source: Globo Rural

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