The government reassessed the expectation of the grain harvest for the 2021/22 period, and Brazil should produce 290 million tonnes, according to data released by Conab (National Supply Company) this Thursday (11).
If confirmed, this volume will surpass the previous crop by 37 million, a period that was marked by a sharp reduction in production due to a serious climate crisis.
“The Brazilian grain harvest takes us to a certain tranquility within an uncertain environment. Day after day, the numbers from Brazil help to reduce the market’s tension regarding the future”, says Sergio De Zen, director of Conab.
The market is experiencing insecurity from an economic point of view, but on the productive side, expectations for the sector are good, he says.
There is global inflation and, at some point, consumption will be penalized. This above-normal inflationary level is delicate because it creates investment uncertainty and pressure on costs.
In the external environment, economies recover at different levels, and so do sectors within economies. This leads to mismatches between the provision of resources, heavily emphasized in support policies during the pandemic, and demand.
There is some relief in food prices, but other sectors are under pressure, such as energy.
These mishaps in the economy can generate a lower demand for agricultural products. The drop in demand for proteins, for example, ends up affecting the consumption of grains. A lower demand for clothing would reduce demand for cotton, explains the director.
In other words, the entire agricultural market is exposed to this uncertainty. “Thus, it is necessary to be very careful in interpreting the data and in the optimism that we are having”, he says.
Looking at the production data for Brazil, the country has just come out of an extremely difficult crop, affected by all the possible ingredients of a bad crop and low productivity.
In this harvest of 2021/22, however, the country enters a period that, apparently, is going without problems.
According to De Zen, the summer planting is going well, which allows the sowing of off-season corn also in an ideal period, contrary to what happened this year. “We are planting well and a schedule adjustment between soybeans and corn will result in greater productivity.”
The director warns, however, that the harvest is at the beginning, and that there is still a long period until harvest. The uncertainties from an economic point of view persist, and should continue for a year or two.
Grain producers feel the effects of rising costs, but much of the production of soybeans and corn has already been sold.
Other segments of this chain, such as the production of chicken, swine and cattle, do not have this locking system. Their profitability fluctuations will affect prices, demand for grains and future expectations.
.
I have over 8 years of experience in the news industry. I have worked for various news websites and have also written for a few news agencies. I mostly cover healthcare news, but I am also interested in other topics such as politics, business, and entertainment. In my free time, I enjoy writing fiction and spending time with my family and friends.
