Brazil Agriculture

Brazil world’s leading power in agri and ranching productivity

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Brazil’s agricultural exports stood at US$ 8.8 billion in October, up 10% compared to the same month a year ago, according to an analysis by the Confederation of Agriculture and Livestock of Brazil (CNA) based on data from the Ministry of Economy.

From January to October, 2021, agricultural exports have already reached US$ 102.4 billion, an increase of 19.5% compared to the first 10 months of 2020 and a record value in the historical series.

Soybeans was the most shipped item in October, with a share of 19.5% and revenue of US$ 1.7 billion which represents an increase of 94.3% compared to the same period in 2020. Raw sugar was the the second main export product (US$ 720.4 million), although sales abroad have dropped 27.3% compared to October 2020.

The most significant increase in foreign sales was for crude soy oil. Export sales for this item rose from US$ 18.5 million in 2020 to US$ 178.3 million in 2021, increasing by 862.1%

Top export destinations in October are China, with a share of 25.5%, followed by the European Union (14.2%) and the United States (9.9%). Other countries with a remarkable participation are: Japan (3.3%), Vietnam (2.9%), Chile (2.4%), Iran (2.1%), Thailand (2%), South Korea (1.9%), and India (1.9%).

Brazil is the world leader in agricultural and ranching productivity in a ranking of 187 countries formulated by the United States Department of Agriculture (USDA). According to the survey released last month, the Latin American country occupies this position from 2000 to 2019.

During the period under review, Brazilian agriculture and cattle ranching had a growth of 3.18% per year, considered the highest rate among the selected countries, which include China (2.03%) and the United States (0.50%). When the analysis interval is extended to 1961 to 2019, the sector in Brazil grew by 3.75%.

Last year, farmers in Brazil fed some 10% of the world’s 7.76 billion population, according to a study released by state-run agricultural research agency Embrapa.

The Embrapa study, released in March, focused on Brazil’s grains and oilseeds production as these are considered basic food staples that can be either used for direct human consumption or as animal feed for meat processing.

Brazil Agri Exports
(Source: Confederation of Agriculture and Livestock of Brazil-CNA)

The findings of both reports (USDA and Embrapa) highlight the South American nation’s strength as a world farming powerhouse as Brazil went from being a net food importer in recent decades to become the world’s largest exporter of produce like soybeans, beef and chicken.

Soybean output, for example, is up more than 40% in the past five years, Bloomberg reported. With the international price of the oilseed rising about 30% in the past year, grower profitability will be the highest in least five years even as costs rise, according to Agroconsult.

The country enjoys a number of climatic conditions in favor of agriculture and ranching production. Among natural factors are hours and intensity of sunlight, the availability of agricultural land and water resources as well as a diversity of climates and soils that are conducive to the production of different crops and livestock.

Despite the growing global demand for food agribusiness faces major challenges, as farmers in emerging countries have limited access to financing. Up to 80% of the farms in Brazil are small, family-run businesses, and a significant number are struggling. A complicated credit system, and a lack of bank branches in rural areas have led to a loans crisis for those most in need, the Financial Times reported. The private sector is filling some of the holes, but critics say much more needs to be done.

Also, problems relating to technology applied in the field, informality, complex taxation , bureaucracy, environmental legislation, property rights and foreign land ownership also permeate the agribusiness sector in Brazil.

Despite the challenges, Brazil’s important contribution to global agribusiness is unquestionable.

With reporting by:  Confederation of Agriculture and Livestock of Brazil (CNA), United States Department of Agriculture (USDA), Embrapa, Agroconsult, Bloomberg, FT