Brazil, the world’s largest net food exporter, is starving. The sector has been achieving impressive numbers in recent years, and exports accumulated in 12 months have already reached US$ 140 billion (R$ 716 billion). In the last decade, this value rises to US$ 1 trillion (R$ 5.1 trillion).
In the first seven months of this year, the country exported the corresponding to US$ 78.1 billion (R$ 399.5 billion) in products intended for human and animal food. In the same period, it imported the amount corresponding to US$ 7.8 billion (R$ 39.9 billion).
For every US$ 1 imported, the country achieved US$ 10 in exports this year. In the late 1990s, that ratio was just $1 for $3.
Even with such a good performance, agribusiness production does not reach most national consumers. Datafolha research indicates that 33% of respondents reported not having enough food on the table.
If agribusiness is doing well, the economy is not. Roberto Rodrigues, former Minister of Agriculture, says that the function of agriculture is to produce. And he produces, he says. Consumers’ purchasing power, however, must be generated by government employment and income policies, according to the former minister.
Data from Pnad ContÃnua (National Household Sample Survey) indicate that the usual real income fell by 5.1% in the second quarter of this year, in relation to the same period of the previous year. When compared to the second quarter of 2020, the drop is 11%.
Contrary to this drop in income, food prices have skyrocketed since the beginning of the Bolsonaro government. On average, overall inflation has risen 28% since the start of 2019, while food has become 54% more expensive. In some cases, such as soybean oil, the increase in the period was 208%, according to data from Fipe (Fundação Instituto de Pesquisas Econômicas).
Agribusiness really grows, and it was favored by good external and internal winds. Externally, Brazilian products are reaching a new consumer class, and with higher incomes, mainly in Asia. While in Brazil, more consumers are turned away from food due to loss of income and high prices.
Domestically, the disarray of the economy raised the unemployment rate, but the high dollar made Brazilian products cheaper abroad, facilitating exports.
The revenues obtained allowed an expansion and modernization of the sector. That same dollar brought, however, high external costs into the country.
Brazil achieves an enviable expansion in grain production. In 2010, there were 150 million tons. This year, the potential reached 300 million tons, a volume not reached due to adverse weather conditions. The country is expected to produce 272 million.
The country is advancing, however, in products aimed more at the foreign market, to the detriment of those produced for domestic consumption.
In a world market of heated demand and rising prices, some products give farmers greater liquidity, such as soybeans.
Of the 24.2 million hectares sown in 2010, the oilseed should be planted in 43 million in this 2022/23 harvest.
This advance occurs, however, not only in new areas, but also in spaces occupied by traditional cultures. In Rio Grande do Sul, the soybean area increased from 4 million hectares in 2010 to 6.4 million last year.
The rice crop, on the other hand, less competitive than soybean, had a reduction from 1.2 million to 957 thousand hectares in the same period in the state. The gauchos are the largest national rice producers. In 2020, the cereal had an increase of 77% in national supermarkets.
Beans, another product present in the daily life of Brazilians, have also been losing ground to soybeans. The national area fell from 4 million hectares in 2010 to 2.8 million in 2022. In Paraná, one of the leaders in the production of legume, the decline was 15% in the period.
National bean production has fallen, and domestic prices have risen 124% in the last three and a half years, according to data from Fipe, referring to the city of São Paulo.
In addition to the lower production of some products, the increase in exports brings into the country the external level of prices, heated even more by the high dollar.
The export of corn, a cereal that is increasingly gaining space in the foreign market, makes basic food products for the low-income population, such as corn flour and cornmeal, inaccessible. Since the beginning of 2019, cornmeal has accumulated a rise of 77%, well above the average inflation for the period, which was 28%.
Brazil has also greatly improved its protein production, thanks to the foreign market. Domestic prices, however, take the lowest-income consumer out of the market.
Chicken meat is up 91% since the beginning of 2019; bovine, 71%; and pork, 55%, levels well above inflation. Traditionally, a little more than 20% of the beef produced went to the foreign market. This percentage was close to 30% in recent years.
External demand heated up prices. At the beginning of 2019, the ton of meat was traded by Brazil at US$ 3,750 on the foreign market. Last month, it was at US$ 6,549, according to Secex (Secretariat of Foreign Trade).
The rise in prices also brings distortions in the domestic market. The kilo of picanha, accessible to higher-income consumers, rose 52%. On the other hand, chuck steak, consumed by lower income groups, increased by 97%.
The increase in food prices does not only depend on internal decisions on what to produce, but also on the external market, which has strong demand.
The markets are totally interconnected, and the biggest difficulty for the Brazilian consumer will be to follow the evolution of external prices, since the internal income is very deteriorated.
This crisis has no end date. The FAO showed, on Friday (5), that foreign prices are falling, but still remain at record levels.
For analyst Ivan Wedekin, the world’s food balance will only come after two good world grain crops.
If this does not occur, the low income of Brazilians will make them one of the most affected in the dispute for food, due to high international prices.
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