Agribusiness, the Main Drive Behind Brazil’s Surplus

Once more Brazil’s agribusiness trade balance surplus is going to sustain the country total trade balance surplus. Ninety percent of the US$ 33 billion surplus forecasted for Brazilian foreign trade in 2004 should come from agricultural production and livestock.

This is the fourth consecutive year that the sector is going to sustain the trade balance surplus.


The National Confederation of Agriculture and Livestock (CNA) forecasts that agribusiness sales should reach US$ 35 billion, and imports should total US$ 5 billion, generating a surplus of US$ 30 billion.


Last year, the trade balance surplus was US$ 24.7 billion, whereas the agricultural surplus was US$ 25.8 billion. In the two previous years, the sector results significantly exceeded the result for total Brazilian foreign trade.


In 2002, the agribusiness trade balance surplus totaled US$ 20.3 billion, 54% more than the national trade balance surplus, US$ 13.1 billion, and in 2001 the livestock and agricultural surplus totaled US$ 19 billion, seven times greater than that of total Brazilian foreign trade, US$ 2.6 billion.


The head of the Foreign Trade Department of the CNA, Antônio Donizeti Beraldo, stated that the performance is the result of an increase in agricultural and livestock production in the country and also of sector competitiveness.


“There is currently greater productivity and use of more advanced technology in the development of cultures and in the management of crops,” he said.


Diversification of the export basket, according to Beraldo, also collaborated to the growth of sales. He mentions this year’s exports of cotton, wheat and maize.


“We exported US$ 600 million in maize this year. In wheat, which we have always imported, sales totaled US$ 200 million. In cotton, we exported US$ 1.1 billion. We are already the second largest world exporter of cotton,” he commemorated.


From January to October this year, agricultural product exports rose 30%, reaching US$ 33 billion. The European Union is still the main client on the foreign market, with 34.6% of purchases, but other markets, like the Middle Eastern and African are also growing as destinations.


Sales to the Middle East, for example, increased their participation from 6.4% of total agribusiness exports between January and October 2003 to 7.2% in the same period this year.


Revenues with sales of agricultural products to Africa represent 5.5%, against 4.8% in 2003. While the European Union grew 22.18% as a buyer, the Middle East expanded 45% and Africa 49%.


“Market diversification is taking place. Europe is already our main market, it is a large market, but the growth potential is small,” stated Beraldo.


Brazil had revenues of US$ 11.4 billion with sales to the European bloc. Export revenues to the Africans reached US$ 1.8 billion and to the Middle East, US$ 2.3 billion.


Soy and Meat


The products that most sustained agribusiness export growth between January and October this year were soy and meats.


Revenues of the soy complex, which includes grain, oil and ground, totaled US$ 9.2 billion, and those of meats US$ 5.05 billion.


This means that both products answered to 43% of sales. Increases in prices of soy and meats helped influence the increase.


Sales of meats were favored by problems suffered by some competitors, like the United States, which had mad cow disease, and by the growth in sales to Middle Eastern markets.


In the case of soy, the lower world offer favors Brazilian sales.


2005


Next year, however, commodities should suffer price reductions on the foreign market due to the large crop forecasted. This should affect the performance of Brazilian exports.


The CNA forecasts exports of US$ 33 billion and imports of US$ 5 billion, generating a surplus of US$ 28 billion.


If these figures are confirmed, revenues with sales should be US$ 2 billion lower than those of 2004.


The value of US$ 35 billion forecasted for exports of agricultural products in 2004 is a historic record.


ANBA ”“ Brazil-Arab News Agency

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