Commodities Shuttle: Breaking down of democracies worries agribusiness, according to association

Food and energy are currently the new world disorder, and the moment is one of uncertainty and fear. Brazil has the capacity to assist on both points.

For this, integration is necessary for strengthening. The integration of production chains will lead to a clear evolution.

The considerations are by Luiz Carlos Corrêa Carvalho, president of Abag (Brazilian Agribusiness Association), made during the entity’s congress this Monday (1st), in São Paulo.

After decades of evolution, the pace of global economic integration has stagnated and there is a dangerous process of building walls, bringing a new phase of globalization based on opportunisms.

For the president of Abag, the moment is of high complexity and with serious difficulties in global supply chains. “There is a clear reduction in the number of countries with democracies, and autocracies now account for a third of global GDP (Gross Domestic Product).”

The post-pandemic has accelerated populist reactions, and Russia’s invasion of Ukraine has dismantled initial efforts against global warming problems and the decarbonization process, as well as accelerating global inflation and interest rates.

This requires from Brazil a deep and careful reflection, says Carvalho. One of the positive points, according to him, is that the new technological revolutions in energy and food are born in the Americas, mainly in Brazil.

Brazilians, with the intensive use of tropical soils, enrich the biodynamics and expand the supply of food and bioenergy.

Brazil has, however, internal problems to be resolved. Deforestation and climate impacts are among them. The discussion is important, according to Jacyr Costa, president of Cosag (Superior Agribusiness Council). For Costa, this discussion is necessary and needs to affect mainly illegal deforestation.

Gedeão Pereira, vice president of International Relations at CNA (Confederation of Agriculture and Livestock of Brazil), says that Brazil is the largest net exporter of food, and the main market is in Asia, which has 5 billion inhabitants. The highlight is China, the world’s largest net food importer.

Costa, from Cosag, points out that the country needs to be more proactive on topics such as the environment, climate and the carbon market. According to him, there needs to be an effort to finance work at universities abroad, as they already do here in Brazil.

The country needs to be together in the definition of methodologies that will outline guidelines for these issues, he says.

Alexandre Parola, ambassador for Brazil’s permanent mission to the WTO (World Trade Organization), says that the country must be present at all discussion tables to participate in new market definitions and not be surprised by decisions taken by others.

More imported fertilizer

Brazil continues to anticipate purchases of fertilizers. From January to July, the country imported 22.7 million tons, according to data released this Monday (1) by Secex (Secretariat of Foreign Trade), 11% above the volume of the same previous period. With this anticipation, the country reduces the need for purchases in the second half of the year, a period of difficulties due to reduced supply and logistical difficulties. If the evolution of purchases was small, the same did not occur with expenses, which reached US$ 15.5 billion in the first seven months of this year. This financial value is 163% higher than in the same previous period.

contradictions Brazil is the largest net exporter of food. How to justify so much lack of food in many homes in the country?

contradictions 2 For Roberto Rodrigues, former Minister of Agriculture, the function of agribusiness is to produce, and it does. The problem is that demand depends on income and job creation.

Soy Brazil exports less, in volume, but guarantees more in terms of revenue. This year, the volume reaches 60 million tons, 10% less than in 2021, but obtained US$ 35 billion, 21% more.

Record Brazilian soy production could reach 152.6 million tons in the 2022/23 crop, according to StoneX estimates. The one for 2021/22 stood at 127 million.