Better Wages Help Food Industry in Brazil Grow 21% This Year

Food industry in Brazil In Brazil, revenues by the food industry grew 1.86% in June, compared with the previous month. In a comparison with June 2007, the growth rate was 17.59%. In the accumulated result for the year, the increase was 20.87%, and in the last 12-month period, of 16.24%. The figures were presented by the Brazilian Food Processors Association (Abia).

According to Abia's balance sheet, the volume of foodstuffs produced in June was 1.68% greater than in May. When compared with June last year, the volume was 6.18% higher. In the accumulated result for the year, production was 7.97% greater than in the same period of last year, and considering the last 12-month period, there was growth of 4.73%.

The president of Abia, Edmundo Klotz, ascribed the expansion of consumption and revenues posted by the sector to the rise in job positions, in the population's income, and to better remuneration of workers. Klotz stated that the first half was very good for the food industry:

"Despite the high costs and inflation, there certainly was an expansion of wages and income, and at quite a significant rate."

He highlighted the meat, frozen food, and dehydrated food sectors, and asserted that the population began to eat better, and that nobler products were the most consumed.

According to the projections of Abia, revenues by the sector this year should reach 268 billion reais (US$ 165.8 million), 16.2% more than in 2007, when they totaled to 230.6 billion reais (US$ 142.6 billion). In foodstuffs alone, the organization estimates revenues at 228.1 billion reais (US$ 141.1 billion). The remaining 39.9 billion reais (US$ 24.6 billion) should be generated by beverage sales.

Agricultural Income

The Brazilian agricultural income, which takes into account the gross value of the 20 main agricultural products, should total 156.7 billion reais (US$ 96.9 billion) in 2008, approximately 17% more than last year.

The figures were calculated by the Strategic Management Advisory at the Brazilian Ministry of Agriculture and disclosed last week, and since almost all crops have already been harvested, the estimate should not be drastically altered.

The highest growth rate should be that of the Midwest Region, where agricultural income should go from 28 billion reais (US$ 17.3 billion) to 39.4 billion reais (US$ 24.3 billion), growth of 40.6%. To arrive at the result, the technicians multiply the crop size by the price received by farmers in the country's leading producer regions.

The actual value, inflation discounted, is obtained from the General Price Index – Internal Availability (IGP-DI), of the Getúlio Vargas Foundation (FGV). Besides the Midwest, which was the highlight, the South, Southeast and Northeast regions recorded growth rates of 8.2%, 4.7% and 4.8%, respectively.

The North region was the only one in which income saw a reduction, of 12.9%, even though grain production increased by 13.1%. That was so because, for income to rise, it is crucial that product prices do not fall.

ABr

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