São Paulo – Brazilian agribusiness exports declined in September and year-to-date in 2014. According to figures released last Wednesday (8th) by the Ministry of Agriculture, US$ 8.29 billion worth of agribusiness products were shipped abroad in September, down 7.4% from September last year. Year-to-date through September, sales amounted to US$ 75.9 billion, down 2.7% from the comparable period in 2013.
The Rural Economy professor at the Federal University of Paraná (UFPR), Eugênio Stefanello, told ANBA that the main reasons for the lower export revenues and the trend of declining volumes are weak international demand and falling prices for the main commodities. Although the United States economy is recovering from the crisis, other countries which are major importers of Brazilian agribusiness products are growing at lower rates. Cases in point include the European Union, China and Japan.
“Commodities prices will be lower this year than in 2013 and will tend to remain flat in 2015, because a mild global recovery is expected. Prices may stay level or be lower, and as a consequence, we may see a scenario where exports will increase in volume decrease in value,” the economist said.
According to Chicago Stock Exchange figures cited by the economist, a bushel of maize (equivalent to 25.4 kilograms) sold for US$ 6.90 in 2012, US$ 5.63 in 2013, US$ 4.67 in the first half of this year and from US$ 3.20 to US$ 4.50 in September. The price of a bushel of soy (equivalent to 27.2 kilograms) dropped from US$ 14.63 in 2012 to US$ 14.14 in the first half of this year, and between US$ 11,00 and US$ 9.50 in September. According to Stefanello, crop failures are not expected in any the major commodities. He said the reason prices are dropping is precisely the fact that supply is rebounding.
Middle East
The Middle East countries are also buying less this year than they did in 2013. According to Agriculture Ministry figures, exports to the Middle East fetched US$ 5.2 billion from January to September 2014, down 12.2% from the comparable period in 2013. Regarding Brazil’s leading Arab destinations, sales are down 15.7% to Saudi Arabia and 8.6% to the United Arab Emirates. In turn, Egypt’s purchases from Brazil were up 5.9%.
To Stefanello, these countries are buying less because ongoing conflicts are forcing them to incur more unplanned expenses. He also remarked that the Russian embargo on products from the United States, European Union, Australia and Canada has caused these suppliers to seek new markets to sell to, including the Middle East, thus increasing competition for Brazilian products. Russia has banned foodstuffs imports from these countries in response to the embargos they have imposed on it due to the conflict underway in Ukraine.
Another cause for the decline in Brazilian exports to Saudi Arabia was the latter’s embargo on Brazilian beef. Saudi Arabia stopped buying the product following Brazil’s announcement, in late 2012, that a cow in the state of Paraná that borne the mad cow disease causative agent had died in 2010, even though it did not manifest the condition. The World Organisation for Animal Health (OIE) has upheld Brazil’s risk status for the disease as insignificant. The Ministry of Agriculture is in talks with Saudi authorities to end the embargo.
*Translated by Gabriel Pomerancblum
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