Timber exports drop and agro buys more from Venezuela – 07/10/2023 – Vaivém

The first half of the Luiz Inácio Lula da Silva (PT) government was marked by record agribusiness exports, but with a series of changes compared to the same period in 2022.

The herd passed more slowly, and exports of wood in logs fell 18% in volume; agribusiness increased imports from Venezuela by 55%; external purchases of pesticides fell by 45%; and wheat imports had the lowest volume in 26 years for that period.

Of course, these changes did not occur just because there was a change of government, but because the international scenario has changed, prices are falling and there has been an increase in Brazilian domestic production of grains and meat. The country’s external acceptance, however, must take on another dimension.

Exports of food and other products related to agribusiness generated US$ 83 billion this year, with an increase of 5% compared to the record from January to June 2022.

Imports, on the other hand, had the opposite trend and fell to US$ 19 billion in the semester, 24% below those of the same period of 2022, according to data from the Sheetbased on Secex (Department of Foreign Trade).

Constant in the president’s speeches, Venezuela had few changes in the pace of Brazilian agribusiness exports to the neighboring country. It was US$ 430 million. A decade ago, this value was close to US$ 1.5 billion per semester.

On the side of imports, however, the scenario is different. Brazilian agribusiness increased purchases in Venezuela by 55%, boosted by fertilizers, which rose to 329,000 tons, worth US$ 107 million.

An important market for Brazilian agribusiness, Venezuela has been restricting imports over the last few years, as the internal economic crisis has increased, and the country’s ability to pay has been exhausted.

Traditional importers of Brazilian meat, Venezuelans are out of the beef market. There was a modest increase in the volume of purchases of chicken and pork.

Among Venezuelan imports in the Brazilian food sector, purchases of vegetable oils, flour, cereals and sugar stand out, according to Secex data.

If the total exports of the agribusiness sector remain at a record level, imports had a strong deceleration, caused mainly by the retraction in spending on inputs.

Driven by the strangulation of the market during the pandemic and, subsequently, by Russia’s invasion of Ukraine, input prices had skyrocketed. As a result, Brazilian spending on foreign purchases rose to US$ 25 billion between January and June 2022. This year, they fell to US$ 19 billion, 24% less than in the same period of 2022.

On the side of cereals, imports of wheat fell to 2.1 million tons in this first half, the lowest in 26 years. Purchases of fertilizers and agrochemicals fell both in terms of volume and costs.

After a first half of 2022 in which Brazil desperately looked for fertilizers in the main producing markets, this year the country imported 16.8 million tons, 13% less. Pesticide imports dropped to 145 thousand tons, 45% less than from January to June 2022.

The soy complex, meats and forestry products are the three main items in the agribusiness trade balance. The country has been getting more revenue from exports thanks to the placement of a greater volume of products on the foreign market, since average prices have been retreating.

The soy complex, which includes grains, bran and oil, had revenues of US$ 41 billion this year, 8% more than in 2022. The highlight was exports of soy grains, which reached a record 62.8 million tons in the first semester.

Among meats, beef has lost space. The volume of the first six months retreated to 955 thousand tons, 4% less. Revenues fell to $4.5 billion, down 22%.

China and the United States, the biggest importers of this protein from Brazil, bought less this year. In addition, average international prices retreated.

The poultry sector managed to export more, raising the volume to 2.34 million tons, thanks to increased purchases from China and Japan. Saudi Arabia and the United Arab Emirates reduced purchases.

The pig farming sector, with greater Chinese demand, increased the volume of exports by 17%, with revenues 28% higher. China took 241,000 of the 577,000 tons shipped abroad by Brazil.

Revenues from coffee beans, due to the drop in prices, were 24% lower than in 2022. Soluble coffee revenues increased by 11% in the period.

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