Brazil’s agribusiness foresees new export record in 2021

RIO DE JANEIRO, BRAZIL – The importance of agribusiness in Brazilian foreign trade and, consequently, in national reserves, and the increase in the value of shares of companies in the sector on the stock market, have increased over the years.

The trend is for this scenario to continue, with the prospect of a new record in 2021, when the sector’s exports are expected to exceed US$105 billion, higher than the previous year’s result of US$101 billion, according to forecasts by the Brazilian Foreign Trade Association (AEB).

Soybeans continue to be the agribusiness flagship crop, with exports forecast to range between 85 million and 87 million tons, worth around US$38 billion, up from last year’s US$28.6 billion and 82.9 million tons, respectively. Although this is positive for the sector, the scenario suggests that important changes are on the horizon.

After topping the list of Brazil’s total exports for six years, soybeans are likely to be displaced by iron ore this year. The evolution of commodity prices will determine the evolution of international trade. “Soy will be the second-largest export. All indications are that ore will again be the main item in 2021 due to the price increase,” says José Augusto de Castro, president of AEB. Nevertheless, Brazil remains the largest exporter of soybeans in the world.

The pressure on prices, which should remain at a higher level than in 2020, results from the increase in demand for agricultural products globally, especially from China. Globally, stocks are currently being replenished, and, in parallel, Brazil has expanded its production.

“The scenario for the agribusiness trade balance is very positive,” says Lígia Dutra, director of international relations at the Brazilian Confederation of Agriculture and Livestock (CNA). In addition to the soybean complex, foreign sales of sugar, cotton, pork, and beef are expected to increase.

Cotton exports increased by 19.40% year-on-year in the crop year 2020/2021, mainly due to the successful promotional campaign for the product in Asia. According to Lígia Dutra, only corn is expected to decline exports due to delays in this year’s harvest.

The CNA’s forecasts for the development of corn trade are in line with those of the National Association of Cereal Exporters (Anec). Sérgio Mendes, director of the institution, notes that the drought will lead to a 20% drop in the harvest in 2021.