If there is one area in which Brazil is clearly competitive globally, it is agribusiness. However, it would be irresponsible to believe that the current economic success of Brazilian agriculture will last forever. Geopolitical, technological, innovation and consumer preference changes threaten Brazil’s bet on the sector.
First, it is worth remembering that the success of agribusiness happens in direct correlation with China’s economic rise. In 1980, China imported 16.4% of the soy it consumed. In 2020, this volume reached 84.1% according to FAO data. It’s no small thing. China now needs to feed 18% of the world’s population, but has only 6.5% of arable land. Brazil took this opportunity to establish itself as a supplier, assuaging part of this demand.
However, since 2021 the topic of food independence has been growing rapidly in China. In this sense, the five-year plan launched in 2021 is mandatory reading for the entire Brazilian agro sector.
The plan puts four essential strategies into practice. The first is to preserve arable land and increase local grain production. The second is to invest heavily in agricultural science and technology and in “smart” agriculture. The third is greater control and investment in seeds and plant varieties. The fourth is to promote the diversification of import sources, avoiding dependence on any country. It is not by chance that the Chinese president made several statements in 2021 to reduce any kind of dependence, for example, stating that “we can never allow others to control our ability to eat, which is a basic matter of survival”.
In addition, he stated that China needs to “get calories and protein from plants”. That phrase signals a growing market for plant-based proteins and plant-based “meat.”
The projection of the Good Food Institute (GFI) is that the demand for plant protein will increase over the decade, reaching the need to produce 30 million metric tons annually by 2030. According to the same institute, this sector today has more demand than supply is able to supply.
Looking at prices, it’s an area where China could be competitive. A kilo of protein concentrate made from plants currently costs in that country from US$ 2.5 to US$ 5.5 (purity less than 90%). In Canada, a kilo of the same product costs about US$ 15, showing signs of an inversion of competitiveness in favor of China when it comes to vegetable protein.
One of the problems is that this plant protein market is highly uncertain from a standardization standpoint. There is still a lack of a clear definition of what is meant by “plant meat” and guidelines for labels and advertising. However, looking at the amount of venture capital entering this sector (US$3.1 billion, or R$15.8 billion, in 2020 alone) continuous growth is to be expected. Brazil has to keep an eye on it.
PS Thanks to Schwarzman College students Muhammad Sidiqui, Petrie, Chatha, Han and Hu for their excellent research.
It’s over Play shuttlecock on court
Already The Beach Tennis fever, which has been taking away space from other sports
It’s coming Discreet padel growth (tennis and squash mix)
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.
