Brazil reduces its food crop forecast for 2021; record tonnage still foreseen

RIO DE JANEIRO, BRAZIL – Brazil, one of the world’s largest food producers, reduced by a slight 0.6% its grain harvest forecast for 2021 to 262.8 million tons, which would still be a record volume for the country, the government reported Thursday, June 10.

The estimates for the month of May cut by 1.7 million tons the production of cereals, pulses and oilseeds in Brazil compared to those disclosed in April, the Brazilian Institute of Geography and Statistics (IBGE) said in a note.

The result represents the second consecutive monthly drop in projections for 2021 and, according to the entity, is due to the delay in the soybean harvest, which as a consequence reduced the corn planting window.

This fact made crops more dependent on the weather, which has affected some Brazilian producing states, mainly Paraná (south) and Mato Grosso (center-west), which are currently dealing with the lack of rainfall, in the midst of one of the worst droughts in recent decades.

However, despite this slight negative variation, the Government continues to estimate a grain harvest 3.4% higher than that of 2020, when it reached 254.1 million tons, so far a record in the country.

According to official forecasts, the cultivated area in Brazil will reach 68 million hectares this year, equivalent to an increase of 3.9% compared to 2020, although the number remained practically stable compared to April’s estimates (0.2%).

Soybeans, rice and corn will account for 92.6% of farm production in 2021.

For the former, a record harvest of 132.9 million tons is expected, 9.4% more than in 2020, due to the rise in prices of this grain on the international market.

Rice production will also rise by 2.8% this year, while corn production is expected to shrink by 3.9% compared to 2020.

If the forecasts are fulfilled, the Brazilian farmlands will remain one of the country’s economic drivers in the face of other sectors that begin to recover after the setback suffered by the pandemic, which has already left almost 480,000 deaths and more than 17.1 million people infected in the country.

According to analysts consulted by the Central Bank, the Brazilian economy will grow by 4.36% this year, thus recovering from the 4.1% fall suffered last year, the worst annual result since 1996, although unemployment levels continue to be very high at 14.7%.