Commodities Shuttle: With income, agribusiness increases imports in inputs and machinery and invests more in 2021

The good moment experienced by the agribusiness sector in recent years, which has been generating cash for producers, allowed record imports in 2021.

Part of these expenses abroad shows that the sector has accelerated investments, since purchases are not restricted to food, but also to machinery and equipment used in agriculture.

The expansion of areas, mainly destined for soy and corn, led the country to purchase a record volume of 40.8 million tons of fertilizer last year, with expenditures, also record, of US$ 14.8 billion in the period .

Part of this expenditure is due to the sharp rise in the prices of these inputs on the international market. Lesser production and geopolitical conflicts caused a disarray in the supply of these products.

Despite prices, agriculture maintained a trend of acceleration in purchases, since, in 2020, the imported volume was 34.2 million tons.

Area expansion also required a greater volume of pesticides to combat pests and inhibit the growth of weeds.

In 2021, imports of these agrochemicals reached a record US$ 3.5 billion. 362,000 tons were placed on the domestic market.

Among foods, wheat is the leader. Dependent on the foreign market for at least 50% of its demand, the country imported 6.1 million tons, a volume similar to that of 2020.

The expenses, however, were higher due to the increase in cereal prices on the international market. The country spent US$ 1.63 billion, 20% higher than in 2020.

There was also an increase in products with which, traditionally, Brazil stands out in exports. One of them is corn.

Due to the crop failure, the country stopped producing 20 million tons of the cereal. To meet domestic demand, companies sought 3.18 million tonnes abroad.

Both the value paid for the cereal, which totaled US$ 728 million in 2021, and the imported volume reached record levels.

The entry of foreign soy into the country was 863,000 tonnes last year, down from 1.19 million tonnes in 2003. The amount spent, however, at US$ 399 million, was a record.

This is the second year that Brazil, despite being the world leader in soy production and exports, has had to resort to the foreign market. Unlike corn, purchases do not occur due to loss of production, but due to excess exports.

The departure of soy in grain forces the country to also increase foreign purchases of soy oil and bran. In the case of oil, expenditures for 2020 and 2021 total US$264 million, while in previous years this value was close to US$30 million per year.

Imports of soy, palm and coconut oils, as well as olive oil, pushed the country’s spending on vegetable oils and fats to $1.53 billion for the year.

Imports of olive oil alone totaled US$ 405 million.

Brazil shows a need for imports also in fish, fruits and vegetables. In the latter case, garlic is one of the main weights in the trade balance.

The producer’s income is allowing the renovation of equipment coming from the foreign market, and used both in the field and in the production of animal feed, on farms and in orchards.

Machines used for harvesting grains and tractors weigh heavily in this account, which reached US$ 800 million last year.

Rice imports, after accelerating in 2020, retreated in 2021, both in volume and in value.

One of the leaders in world meat exports, Brazilian protein imports reached US$ 341 million last year, a 29% increase over 2020.

One of the reasons for the acceleration of Brazilian spending in 2021 was the rise in international prices. On average, fertilizers cost, in December, 129% more than in the same month of 2020. The increase in corn was 57%; soy, 33%, and wheat, 23%. Brazilian agribusiness exports maintained a strong acceleration in 2021, with values ​​close to US$ 120 billion.

Foreign sales of soy, the flagship of the agribusiness balance, rose to 85.85 million tons, with revenues of US$ 38.4 billion. Both values ​​are records.

On the other hand, fresh, refrigerated and frozen meats, even with the Chinese ban on beef for three and a half months, reached US$ 18 billion, up 13% compared to 2020.