São Paulo – Exports of agribusiness products from Brazil reached US$ 7.34 billion in August, a 17.4% decline from a year ago. Year-to-date through August, exports amounted to US$ 59.71 billion, down 11.7% from US$ 67.61 billion last year. The figures were released this Friday (11th) by the Brazilian Ministry of Agriculture, Livestock and Supply.
According to the economics professor at the Federal University of the State of Paraná and technician at the National Supply Company (Conab), Eugênio Stefanelo, in spite of the favorable exchange rate, low commodity prices are detracting from revenues. Last year, Stefanelo said, agriculture and livestock exports fetched US$ 96.7 billion, but that level is unlikely to be matched this year. The professor expects sales to amount to US$ 85 billion by the end of December.
He remarked that major importers of Brazilian product, like Venezuela, the Middle East and Argentina, are struggling with domestic issues, and that although the world economy is growing, its performance falls short of pre-2008 crisis levels. In a statement, the Ministry said soybean and raw beef export volumes are on the rise, with the caveat that revenues shrank due to falling international prices.
Stefanelo said the average price of a bushel of maize (equivalent to 25.4 kilos) was US$ 6.90 in 2012, US$ 5.63 in 2013, US$ 4.18 in 2014 and US$ 3.78 in the first half of this year. The same happened with soy. The bushel (equivalent to 27.2 kilos) cost US$ 14.63 in 2012, US$ 14.01 in 2013, US$ 12.01 in 2014 and US$ 9.86 in the first half of 2015.
Despite the plummeting prices, he claims export revenues will tend to start climbing as early as next year. “Performance in 2016 will be determined by the recovery of the world economy, the exchange rate and the crops. In Brazil, we will have a larger planted area for soy, the recovery of the sugar and ethanol industry, and a better coffee crop. Barring an eventual crop failure, we might see a rebound,” he said. He hopes the US dollar will be worth R$ 4 by the end of 2015 and even more in 2016.
Chinese growth is has lost steam in the past few years. However, Stefanelo remarked, the Asian country is shifting its economic model. Its growth used to be driven by investment and exports. From now on, it should rely on the expansion of domestic consumption.
“More Chinese citizens will join the economy, income should grow and so should urbanization. Spending on food and clothing will be the first to go up. Considering this, South America and particularly Brazil are in a position to meet that demand,” he explained. He also noted that dwindling oil revenues and instability across the Middle East are slowing down the region’s imports from Brazil, but he believes in a reversal of this scenario in years to come.
*Translated by Gabriel Pomerancblum
