MercoPress. South Atlantic News Agency

Brazil agribusiness exports US$ 160 billion in '22, but inputs have soared and '23 could see a return of protectionism

Brazilian agribusiness exports, which totaled US$101 billion in 2020, increased to US$121 billion last year and are expected to be close to US$160 billion this year.

Brazilian agribusiness exports should reach a record US$ 160 billion this year, which represents an increase of 32% compared to 2021, and a number that also was surprisingly high last year. But on the other hand input imports have never been so costly because of the international prices with inputs reaching almost US$ 50 billion, up 51% year to year.

The surprising export revenue began with the effects of the pandemic when countries increased their food stocks in anticipation of a disruption in the food supply. Likewise given the significance of both Russia and Ukraine in the supply of grains to the international market, the fact they are involved in an exhausting war means further supply disruptions and again commodity prices' increases.

The pandemic and the war, while benefiting Brazilian farmers and exporters with higher prices, boosted spending. Russia, an important supplier of fertilizers, reduced the supply, and prices skyrocketed.

Brazil is well-positioned when it comes to food purchases. They represent 28% of total imports. Cereals, driven by wheat purchases, add up to the highest expenses.

The main Brazilian expense, however, comes from buying inputs, mainly fertilizers, and agrochemicals. Highly dependent on imported fertilizers, the country intensified purchases after the war.

Importers came to buy a volume of more than 4 million tons per month from May to July this year, while In November, the volume retreated to 2.4 million.

The skyrocketing prices have started to retreat but nevertheless the change in the magnitude of international values brought new costs to Brazilian agriculture, which will still be present next year and next harvests..

Brazilian spending on purchases of fertilizers rose to US$ 23.6 billion from January to November, well above the US$ 13.4 billion in the same period last year.

Under the new arrangement of the international market, Canada rose to the second position in the supply of fertilizers to Brazil. Russia remains in first place but with a lower value.

Despite an increase in purchases in the middle of the year, Brazilian fertilizer imports, which have already reached 36 million tons, are expected to be lower than in 2021, according to Secex (Secretary of Foreign Trade) data.

The increase in spending on agricultural imports is also due to pesticide purchases. Imports totaled 640 thousand tons this year, worth US$ 6.5 billion. Volume increased by 58% last year while spending increased by 73%.

The performance of exports is credited mostly to the soy complex, which is expected to generate US$ 59 billion in revenue this year. Meats have already generated 29% more up to November, totaling US$ 22 billion. Cereals reached US$ 12 billion in revenue this year, a 200% increase due to increased corn, wheat, and rice exports.

As anticipated above, Brazilian agribusiness exports, which totaled US$101 billion in 2020, increased to US$121 billion last year and are expected to be close to US$160 billion this year.

Successive international situations have caused a slowdown in the world economy, and there are signs of a decline in global commodity prices.

Faced with this scenario Brazil must also prepare for increased protectionism and import barriers, mainly from the European Union. The bloc has promised to impose new rules and requirements on imports of commodities, and Brazil will be one of the most affected.