news, features, articles and disease information for the crop industry


Brazil Moves to Be World's Breadbasket

20 December 2010

BRAZIL - Agribusiness exports should reach $75 billion this year, more than double the figure recorded eight years ago, according to

Brazil is now the world's leading exporter of coffee, sugar, ethanol and orange juice, and is close to leading the beef and poultry markets as well.

"The importance of agriculture to food markets worldwide is growing, and we should increase our share even further as suppliers of agricultural products to the world from now on," says Wagner Rossi, the minister of Agriculture, Livestock and Supply.

He claims that over the last eight years, exports have grown by 111 per cent, from $30.65 billion in 2003 to $64.78 billion in 2009. Sales peaked in 2008, when the trade surplus was $71.84 billion, but the forecast is that in 2010, sales should reach $75 billion. By November, agricultural product exports had generated $70.3 billion in revenues.

Agribusiness accounted for 42.5 per cent of Brazilian exports in 2009, and the rate would have been the highest ever if it was not for the 14 per cent decline in agricultural commodities' prices due to the international financial crisis of 2008, which is considered the strongest ever since the New York Stock Exchange crash, in 1929.

International negotiations have also gained importance over the past several years. The foreign agenda has become more proactive, through frequent and strategic missions organized by the Ministry of Agriculture.

Alongside representatives of other governments, it has been possible to negotiate the official opening of markets, such as the poultry markets of South Korea and China, and pork to Vietnam. Besides, the country was able to regain access to the beef markets of South Africa, Chile and Russia, after these had been shut down due to foot-and-mouth disease outbreaks in the states of Mato Grosso do Sul and Paraná, in 2005.

The International Relations secretary at the Ministry of Agriculture, Célio Porto, claims that there are still challenges to be overcome in negotiations, especially with regard to increasing the pork market in Japan, South Korea, China and the European Union. "These markets are important and we can have an even greater share of them," he says.

In 2011, the United States is expected to allow exports of raw beef and pork.

The profile of global trade has also changed over the last few years. The differential of added value is a highlight, in the secretary's opinion. "The government has encouraged the placement of processed products in other markets, and we are being able to make the enterprises aware of it," claims Porto. Thus, with support from the government, the production chains and exporting industries are being able to match the global consumption profile, making Brazil a strategic country in food trade.

In addition to public policies aimed at increasing exports, the leap in activity is due to greater demand for food worldwide. Rising income, population growth, higher life expectancy and a strong urbanization process have led to the current scenario.

Growing Demand

The flagship of Brazilian agricultural exports, soy should attract greater interest from other countries as a consequence of the rising demand for food in developing countries, such as China. Besides, the drought faced by Russia in 2010 led the authorities to suspend international sales of the grain on the following year, creating a good opportunity for Brazilian exporters. "Previous experiences show that measures of this type discourage local production and increase the need to import," claims Célio Porto.

Proof of that is what took place in India, formerly the world's leading exporter of sugar. After the crop failure of 2009, caused by unstable rains, the Asian country has become the leading buyer of Brazilian sugar. As the supply from the former leader dropped, importers of the product sought Brazil.

Between 2007 and 2009, the three leading agribusiness export sectors (sly, meats and sugar) accounted for 98.6% of the increase seen in international sales value. That means that the Brazilian export basket concentration has increased in the main sectors. Soy grain, chaff and oil, meats, the sugar and ethanol complex, coffee and tobacco have accounted for over 80% of the total shipped in 2009.

Brazil has a significant market share in some of the leading agricultural export products. Half the global exports of raw poultry come from the country. In the case of sugar, the share is 37 per cent, tobacco, 29 per cent, green coffee, 26 per cent, soy grain, 25 per cent, soy oil, 24 per cent, raw beef, 21 per cent and soy chaff, 20 per cent.

Future Expectations

As a result of the trend of decline in Brazilian population growth rates and the simultaneous increase in productivity, the production surplus that gets exported may rise in coming years, leading to an even greater increase in the country's share of agricultural trade worldwide.

Data from the United Nations Food and Agriculture Organization (FAO) and the Organization for Economic Cooperation and Development (OECD) show that the Brazilian agricultural sector will have the highest growth rate in the world, at over 40 per cent, by 2019.

Projections for 2020, taken from a survey of the Strategic Management Advisory of the Ministry of Agriculture, indicate that Brazil will hold nearly half the global market for beef, pork and poultry. The rate should go from the current 37.4 per cent to 44.5 per cent within ten years.

The general coordinator of Strategic Planning at the ministry, José Gasques, confirms that Brazilian agribusiness should be influenced by rising consumption worldwide and highlights that, on the other hand, there will also be pressure caused by domestic demand.

"Basically, the reason is the increased purchasing power of Brazilians, which translates into higher domestic consumption and industrial processing of raw materials," he claims. Further, as income grows, the population tends to consume higher value-added products such as milk products and meat.

Ethanol should rise on the export basket over the next few years, by more than 220%, going from 4.6 billion to 15.1 billion litres in the 2019/2020 period. The outlook is also good for cotton (91.6 per cent), milk (84.3 per cent), beef (82.8 per cent), maize (80.3 per cent) and poultry (71.5 per cent).

TheCropSite News Desk

Our Sponsors