Alexandre Rocha
São Paulo – The surplus of the Brazilian agribusiness trade balance was over US$ 16 billion in the first half of this year, with export of US$ 18.49 billion and import of US$ 2.41 billion. With regard to the country trade balance surplus as a whole, it was little over US$ 15 billion in the period, a historic record, resulting from export of US$ 43.3 billion and import of US$ 28.2 billion. This, in the opinion of specialists heard by ANBA, shows that the agribusiness sector has been mainly responsible for the favourable Brazilian trade balance result.
"This is the truth. I do not want to praise my own sector, but it is a statistical figure," stated the vice president for international affairs for the National Confederation of Agriculture and Livestock (CNA), Gilman Rodrigues.
"(Agribusiness) is the largest fund generator. This is why it is said that Brazil is returning to its roots, eyeing the countryside, taking the rout that is most natural," added the director of the Brazilian Agribusiness Association (Abag), Luiz Antonio Pinazza.
Based on the figures for the first half, the head of the CNA foreign trade department, Antonio Donizeti Beraldo, estimated that sector export should reach US$ 35 billion up to the end of the year, informed the organization press department.
If confirmed, these figures will represent a 15% increase over the result for last year, which reached US$ 30.6 billion. With regard to import, in the evaluation of the CNA, the total should reach US$ 5 billion and, consequently, the Brazilian trade balance surplus should reach US$ 30 billion.
Total country export, in turn, should reach US$ 88 billion, according to forecasts by Development, Industry, and Foreign Trade minister Luiz Fernando Furlan. He believes that import should reach around US$ 60 billion and the trade balance surplus should end at around US$ 28 billion, less however than the forecasted agribusiness surplus.
Two factors essential for good sector performance, according to Rodrigues, are the quality and competitive price of Brazilian agribusiness products. In his evaluation, if products from Brazil were not so greatly affected by tariff barriers practiced by consumer markets, such as Europe, for example, revenues could be greater, even with the shipping of the same volumes. "For this purpose, it is essential to be very careful with regard to international negotiations," he stated.
Surplus does not guarantee development
Pinazza pointed out, however, that a large trade balance surplus alone does not generate country development. "This may result in a mistaken conclusion," he stated. He believes that the increase in import in other sectors, especially in industry, may show an improvement of the economy.
Industries import raw materials and capital goods to invest in production. "Some sectors import more raw material favouring the local industry. Initially the company imports, but it later replaces import. With regard to country development, this must be taken into consideration," he declared.
It is a consensus between sector specialists that the agribusiness sector took advantage of difficulties in other countries to open new markets. Difficulties such as a smaller soy harvest in the United States last year, mad cow disease in the country, drought in Australia, and the avian flu epidemic, which affected livestock in other chicken exporter countries.
In this sense, could the return of products from these countries to the international market make Brazilian export more vulnerable, due to its dependence on agribusiness? "Vulnerable, but not much," answered Rodrigues. "Brazil can keep these markets as it has quality and price. The country may even lose part, but not all," he stated. "Brazil is very competitive, has quality and productive scale. It is not easy to compete with Brazil," added Pinazza.
Rodrigues pointed out, however, that the country must invest in logistics so as to cope with the productive increase, and in sanitary defence, so as not to suffer the same problems its competitors faced. "If Brazil maintains its visibility and sanitary quality, guaranteeing consumer trust, and improves logistics, there will be no ghosts on the foreign market," he declared.
Sector GDP
According to a study by the CNA, the country Gross Domestic Product (GDP) in the agribusiness sector is going to reach an estimated US$ 174 billion in 2004, the value registered in 2003 was US$ 162.42 billion (according to the ministry of Agriculture). This calculation takes into consideration all phases of the sector chain, from production itself, including raw material and product industrialization, and distribution.
For primary agricultural production, the forecast is that the GDP should reach around US$ 32.7 billion. With regard to primary livestock production, the forecasts is US$ 22.3 billion.
