Setback for Brazil’s Agro-Industry in May 2024

In May 2024, Brazil’s agro-industry experienced a decline, with a 1.7% drop from April, according to data from the Center for Agribusiness Studies (FGVAgro).

This decline mirrored a slight 0.4% year-over-year reduction from the previous May.

Despite this recent dip, the industry still posted a 3.1% growth for the year, albeit lower than the 4.1% recorded by April.

Rio Grande do Sul’s severe floods significantly impacted this downturn. The state, pivotal in sectors like tobacco and agricultural inputs, saw these areas hardest hit.

Agricultural inputs tumbled by 8.3%, and tobacco plummeted by 23.1%, the steepest fall since February 2015.

The industry’s struggle extended beyond these sectors. Food and beverages shrunk by 1.1%, and non-food products dropped by 2.4%.

A lesser number of working days in May—21, down from 22 in the previous month and year—further squeezed production.

Background

In 2024, Brazil’s agriculture will reflect a strategic shift. Overall crop production is to dip slightly to 300.7 million tons, with rises expected for rice, beans, wheat, and cotton.

Specifically, cotton production is expected to rise by 7.7% to 8.2 million tons, according to recent IBGE data.

Rice will grow modestly by 2.0% to 10.4 million tons, beans by 11.1% to 3.3 million tons, and wheat by a notable 27.0% to 9.8 million tons.

Conversely, soy, corn, and sorghum are on the decline. Soy will drop by 2.4% to 148.3 million tons.

Corn is forecast to decrease by 10.8% to 116.9 million tons, with significant reductions in both crop seasons. Sorghum will also decrease by 6.8% to 4.0 million tons.

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