Brazil’s agribusiness GDP should grow up to 2.5% in 2023

The agribusiness GDP (Gross Domestic Product) should remain stable or, in a more optimistic scenario, grow up to 2.5% in 2023, according to estimates by the Confederation of Agriculture and Livestock of Brazil (CNA).

The main reason for this timid growth is the high production costs and the downward trend in the international prices of agricultural commodities.

The downward trend that impacts Brazil the most is that of soy, the main Brazilian export grain.

The Confederation estimates that the country will close in 2022 with a drop in the agribusiness GDP of 4.1%.

This reflects the high input costs in the sector, especially fertilizers, which rose more than 100% this year because of the war in Ukraine.

In 2021, before the conflict, the sector grew by 8.3%.

Bruno Lucchi, technical director at CNA, pointed out that wheat is a product that should have a higher price in 2023. Mainly because of the impact of Russia and Ukraine’s production on the European market.

The main concerns for 2023, according to CNI, are:

• slowdown in the global economy;
• low growth in the world trade of goods;
• energy crisis;
• geopolitical instability;
• slowdown in Chinese imports; and
• protectionist measures for food security.

The expectation of revenue from livestock activity also follows the trend of the sector’s GDP, with a slight increase for 2023 of 1.1% compared to this year.

Only livestock farming should see a drop in revenue in 2023 of -2.3%.

The estimate for the 2022/2023 grain harvest is a growth of 15.5%. CNA affirms that the increase should be registered by the increase in the planted area in relation to the previous cycle. Soybeans, for example, should increase their cultivated area by 4%.

Besides this, soy should increase its productivity by 17% compared to the last harvest. Production should total 153.5 million tons.

However, with the tendency for prices of this grain to fall by 2023, there is an expectation of an increase in stocks in 2023.

ELECTIONS AND TRANSITION PEC

About the elections, the entity’s president, João Martins, said that he has not yet sought dialogue with the elected government because the transition team has not yet presented projects for agribusiness.

He affirmed that when the proposals are published, they will seek the government in case of disagreement.

Bruno Lucchi also defended the revision of the spending cap. But he said that the PEC should not open space beyond the spending limit for 2 years as it is in the proposal, but for 1 year.