Read this Monday’s edition of the FolhaMercado newsletter (17) – 07/17/2023 – Market

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Grains in the open air

The aerial images of a mountain of maize in the open air in the interior of Mato Grosso, obtained by BBC News Brasil, illustrate a problem that holds back an even greater growth of agro in the country: the logistical bottlenecks.

Understand: tons of corn are stored outdoors and exposed to high temperatures, the possibility of rain and attacks by insects and rodents due to the lack of grain storage silos in the country.

The problem is frequent, but this year it was aggravated by the super harvest of grains and the drop in commodity prices, which makes producers hold back exports while they wait for an improvement in prices.

In this scenario, it is corn that suffers the most, because a sack of grain is worth less than half that of soybeans – which for this reason “cuts the queue” at storage.

In numbers: the 2022/23 grain harvest is projected at 316 million tons by Conab (Companhia Nacional do Abastecimento).

• Meanwhile, the storage deficit for these commodities in Brazil grew from 83 million tons in 2022 to 118 million tons this year – also a record.

• In 2021, storage capacity in the country was 75% to 80% of production. That of the United States is 150%.

The problem also erupts in transport. Since the producer is harvesting more, there is a greater demand for trucks, the cost of freight increases and the queue for loading and unloading products increases. The final bill goes into the pockets of the producer and consumers.

More about agro

• “Sky is the limit” for the sector, but it is necessary to face “bandits”, says Roberto Rodrigues, who was Minister of Agriculture from 2003 to 2006.

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egg price soars

Despite the country registering an inflation of 3.16% in the 12 months ending in June, some items continue to weigh heavily on Brazilians’ pockets.

This is the case of the chicken egg, one of the most consumed foods in the country and a sure presence in the most varied diets.

In numbers: the increase is 22.93% in the 12 months ending in June, the biggest increase in egg prices in a decade.

In May, the dozen were sold on average for BRL 13.10 in the capital of São Paulo, 30.9% above the previous year (R$ 10.01), according to a survey by Procon-SP in partnership with Dieese (Inter-union Department of Statistics and Socioeconomic Studies).

Which explains the rise in the egg:

• Production costs: grains such as corn, which is used in chicken feed, rose sharply last year as a reflection of the war in Ukraine.

• Meat substitute: with the increase in prices of other proteins, the egg started to be even more adopted in the diet of Brazilians.

• Lowest offer: the increase in demand met a moment of lower egg production in the country, in an effect of the 2020 drought, which affected the corn harvest at the time and discouraged the increase in breeders [aves poedeiras].

Relief: this scenario has an expiration date, economists assess. The expected super harvest for this year and the drop in commodity prices should help cool down egg inflation. The effect is already visible in the reduction of meat prices.

More on inflation

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Banks invest in concerts

From Rock in Rio to Taylor Swift, Brazilian banks invest heavily in the entertainment industry by sponsoring major concerts by national and international artists.

Which explains: in addition to strengthening the brand, the objective is to attract new customers –mainly younger ones– with exclusive benefits.

Partnerships between banks and artists usually involve an exclusive advance pre-sale to customers, who also have discounts and extended installments on their credit card. See some of them:

• C6: bet on performances by American singer Taylor Swift.

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Startup of the Week: Cobli

On Mondays, the chart shows an x-ray of a startup that recently announced a fundraising.

The startup: Founded in 2017, Cobli operates with fleet management for companies and promises to reduce the costs involved in road transport.

In numbers: the startup announced on Wednesday (12) that it received a contribution of $20 million (BRL 95 million).

• The company adds BRL 350 million in volume collected since its foundation.

Who invested: the contribution was led by the international funds IFC, from the World Bank, and Fifth Wall. The Qualcomm Venture round was accompanied by NXTP Ventures and GLP Capital Partners, who were already investors in the company.

What problem does it solve: Cobli installs sensors and cameras in vehicles to collect data and monitor the fleet.

• Telemetry captures information such as location, routes, accelerations, video images and braking.

• In this way, it is possible to manage fuel consumption, preventive maintenance and even the way drivers drive.

• The startup recently launched a service that adds artificial intelligence to images taken inside vehicles with the idea of ​​reducing traffic violations, such as cell phone use while driving.

Why it stands out: in addition to being the biggest contribution announced by Brazilian startups in the last week, the companies cites figures from the American market to indicate the potential for expansion of the fleet management sector in Brazil.

• There are 11 million commercial vehicles in Brazil, but only 20% use some telemetry feature, according to Berg Insight Fleet Management.

• In the USA, the participation of this resource in the segment reaches 60%.