Commodities Shuttle: Agricultural favor balance, but fertilizer spend rises 178%

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Commodities Shuttle: Agricultural favor balance, but fertilizer spend rises 178%

High commodity prices keep the trade balance buoyant. Although the pace of exports, in terms of volume, has slowed this year, revenues continue to reach records.

The ten main products of Brazilian agribusiness generated US$ 46.9 billion in the first five months of this year, a volume well above the US$ 36.8 billion in the same period in 2021.

Climatic effects on crops, retention of products by several countries in these times of war and lower food supply brought effects to the foreign commodity market that had not been seen before. Prices have soared, raised inflation rates around the world and are expected to put more than 300 million people in a state of acute hunger, according to the UN.

Soybeans, the national leader in the trade balance, had a drop of 15 million tons exported in May last year, to 10.6 million in the same month this year. Despite the decline, revenues for the month totaled US$ 6.6 billion and remained at the same level as in 2021. The average price of soybeans appreciated by 38% in the period, rising to US$ 617 per ton.

Based on this price evolution, Abiove (Brazilian Association of Vegetable Oil Industries) readjusted the total revenues of the soy complex (grains, bran and oil) to US$ 58 billion this year, well above the US$ 48 billion in 2021. .

This increase in revenue occurs even with the forecast of a reduction in exports of the oilseed to 77 million tons. In 2021, there were 86 million.

With the exception of pork, other commodities have been registering good appreciation this year. Coffee prices lead, with an increase of 80%, in the comparison of May this year with the same period in 2021.

Brazil, the main world supplier, has a lower production than expected, due to the effects of the frosts that occurred last year. Even with a slower pace of exports, this year’s revenues from the sector are already 54% higher than those from January to May of last year.

Beef and chicken also show good performance. Demand remains strong, and international prices remain high. The three “in natura” proteins (beef, pork and chicken) add up to US$ 8.8 billion this year.

Secex (Secretariat of Foreign Trade) registers a 31% increase in the average value of a ton of beef, which rose to US$ 6,455 last month. The evolution of chicken meat in the international market was even higher, reaching 35% in the period. The ton of protein went to US$ 2,100.

The pork meat is different from the others. Partial recomposition of China’s swine herd and lockdown in the Asian country, due to Covid-19, reduced Chinese appetite in the international market, interfering with prices. After exporting over US$ 1 billion in the first five months of 2021, Brazil managed only US$ 835 million this year. The volume exported fell 7% in the year.

One of the surprises in the agribusiness balance was foreign sales of wheat. Despite the traditional dependence, the country took advantage of foreign prices and placed 2.45 million tons of wheat abroad, 332% more than last year.

Brazil put a good volume of the cereal in 14 countries on different continents. Saudi Arabia was the leader in imports, buying 505,000 tonnes.

Indonesia, Vietnam, Pakistan, Morocco, Angola and Israel were also on this list.

Cotton benefited from higher oil prices. The rise in synthetic fiber prices made the product rise 33%. Even with exports 24% lower this year, revenues remained close to those of May 2021.

The international scenario, which caused a rise in the prices of agricultural commodities, also brought heavy costs to Brazilian producers, mainly in the purchase of inputs.

Difficulties in obtaining fertilizers made Brazilian importers accelerate purchases. Last month, the country imported 4.1 million tons, a record for the months of May and 57% more than in 2021. Normally, this is a volume acquired only in the second half of the year.

The spike in fertilizer prices, due to the pandemic, reduced production, difficulties in maritime transport and the invasion of Ukraine by Russia, made Brazil spend US$ 9.6 billion on these products in the first five months of the year. This value exceeds by 178% the one from January to May of last year. 15.2 million tons were acquired.

The expenses with agricultural pesticides also weigh on the producers’ pockets. In this case, in addition to prices, there was a 70% increase in imported volume, which reached 188,000 tonnes, according to Secex. As a result, spending rose to US$ 1.8 billion, 94% more.

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