Despite Economic Woes Brazil’s Agribusiness Still Booming

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – While Brazil continues to capture negative headlines in business with news of loss of investment grade, galloping inflation and deficit budget bills, in agriculture, the South American country seems to be growing by leaps and bounds. The latest data forecasts for grain and cereal production shows increases from last year’s harvest yields and the Ministry of Agriculture has just announced the opening up of new export markets for Brazilian goods.

The 2015 agricultural harvest in the country is expected to be 8.6 percent higher than that of 2014 according to the IBGE (Brazilian Statistics Bureau), totaling 210 million tons of oil seeds, cereals and vegetables. Grains such as soybean, corn and rice should register growths of 11.9 percent, 6.5 percent and 3.6 percent respectively, while coffee and beans are expected to register declines in production.

In line with the IBGE forecast, government agency Conab (National Supply Company) forecasts a slightly lower growth in agricultural production this year, of 8.2 percent. In addition to the good news coming from grain and cereal production, Brazil is also opening up new export fronts for its meats.

Agriculture Minister, Katia Abreu announced last week that the country is in the final phase of exports negotiations with approximately eighteen countries for Brazilian meat products. According to government officials these negotiations may lead to an additional US$1.95 billion in Brazilian export revenues.

The most significant negotiations are said to be with Japan in regards to Brazilian exports of processed bovine meat. Other deals are also in the works with Canada, Mexico, South Korea, Malaysia and Saudi Arabia.

More good news is coming from the dairy sector. After nineteen years of negotiations, China, one of Brazil’s largest trading partners, has also agreed to open up its market to Brazilian dairy products.

According to Palermo, China is the largest dairy importer in the world, purchasing almost fourteen percent of all global dairy exports, or US$6.4 billion, in 2014, but Brazil only had 0.7 percent of that market. The official said that Brazilian companies will focus on selling mainly powdered milk, cheeses and butter to the Asian giant.

“We have entered the two largest dairy markets in the world,” stated Tatiana Palermo, Agribusiness International Relations Secretary at the Ministry of Agriculture, while also announcing the obtainment of licenses of another thirteen Brazilian dairy plants to export to Russia.

Brazil’s agricultural sector has in the past few years been one of the driving forces in the country’s economy, registering record upon record harvest yields and opening up several new markets for Brazilian agricultural goods abroad. This year, the sector has been especially important to the Brazilian economy with its GDP growing by 1.8 percent during the second quarter in relation to the same period last year, while the Brazilian economy overall shrank by 2.6 percent.