Brazil to Dominate Global Trade of Beef, Chicken, Sugar and Soy

Brazilian cattle grazing Brazil should dominate a large share of foreign trade of agricultural products over the next 10 years. According to the study "Brazilian Agribusiness Forecasts 2008/2009 and 2018/2019", disclosed yesterday by the Ministry of Agriculture, Livestock and Supply, Brazilian exports of beef should represent 60.6% of the global volume up to 2018, against 31% today, and chicken, 89.7%, against 44.6% nowadays.

In the case of sugar, Brazilian participation in global exports should rise from 58.4% to 74.3% in the same period, soy oil sales should rise 63% to 73.5%, soy exports from 36% to 40% and corn from 13% to 21.4%.

"As these sectors have greatly increased their productivity and are generating competitive prices, they push out of the way other suppliers, like Australia and New Zealand, for example," said the general coordinator of Strategic Management at the Ministry, José Garcia Gasques, who is responsible for the study.

Apart from that, some countries are tending to reduce agricultural production. Gasques also pointed out that the United States Department of Agriculture has already announced that there should be a reduction in the next corn crop.

"The US are currently the main producers of corn, therefore significant space may be opened. There is great potential and perspectives for Brazil are good, as we can still increase our productivity," he declared.

In fact, the productivity gain should be the great booster for growth of Brazilian production. The Ministry hopes that the national grain crop should grow 29% over the next 10 years, rising from 139.7 million tons to 180 million tons.

Production of meats should rise 51% to 37.2 million tons. The cultivated area, in turn, should expand by 15.5 million hectares, or 21% over the 70 million hectares used today, according to Gasques. That is, the growth in production should be much greater than the occupation of new land.

Another factor to boost the Brazilian production is the growing consumption, both on the domestic and foreign markets. The Ministry forecasts growth of 59% in foreign sales of grain and 55.4% in sales of meats.

However, 52% expansion in production of soy and corn should be turned to the Brazilian market, and 50% in the case of meats. Just to give an idea, nowadays, 80% of beef produced in Brazil is consumed in the country itself.

Still in the area of demand, the Ministry pointed out the countries with the greatest potential for growth in consumption of beef. They include China, Hong Kong and Egypt.

Egypt, for example, should post 1.15% annual growth in cattle beef demand until 2017 and 1.35% yearly expansion in the consumption of chicken, according to figures disclosed by the Food and Agricultural Policy Research Institute (Fapri), an organization connected to the University of Missouri, both in the US.

"The rates of growth are greater in the countries that have managed to increase the income of their populations," said Gasques, pointing out that as consumer income rises, consumption of beef increases.

"The tendency is for consumption of beef to grow above the expansion of income," he added. In this field, Brazil has an extra advantage: the cost of production. The country can raise cattle on grazing ground with less time before slaughter and lower weight, without the need for subsidies.

On presenting the study, the minister of Agriculture, Reinhold Stephanes, said that the international financial crisis should not stunt the forecasted agribusiness growth. According to him, the research was developed using methodology that takes into consideration a historic series of figures for the last 32 years, a period in which there were several crises.

"In the future projections, the research takes into consideration the current crisis. Food is the last item to be cut," said the minister in a Ministry press statement.

Apart from that, Gasques also pointed out that in recent months the global demand for agricultural products has been rising above production. This situation should continue with the growing urbanization, which results in lower production in the countryside in many countries. "This behaviour creates a good opportunity for countries like Brazil, which dominate production technologies and have natural resources," he said.

He added that in the elaboration of the study, the AGE team took into consideration three uncertainty factors: global recession, protectionism in countries and severe climate changes. Gasques pointed out that in the 32 years used to make the future forecasts, in seven non-consecutive years there were reductions in production, be it for domestic or international economic reasons, or problems with the climate. "For this reason we opted for conservative forecasts," he declared.

If the financial crisis does not represent great risk, as people cannot stop eating, the AGR coordinator also does not forecast a wave of greater protectionism, as "the horizon shows a situation of hardship to replace stocks". That is, the production of countries that adopt protectionist policies should not be enough to supply demand.

The most unpredictable variable is the climate. Gasques recalls, however, that Brazil also has around 100 million hectares of unexplored or underused agricultural frontiers, without its use meaning deforestation, especially of the Amazon. They are degraded pastures or savannah areas.

The study also pointed out the increase of annual production of ethanol, from the current 3 billion liters to 9 billion liters; milk, from 27.4 billion liters to 36.9 billion liters. These, plus the soy complex (grain, oil and chaff), wheat, corn and meats are considered the most dynamic products.

The study also included oranges and orange juice, sugar, beans, rice, potato, cassava and cotton, all with perspectives for growth in production, from a minimum of 0.3% in the case of cotton to a maximum of 173.7% in ethanol.



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