After the already significant growth registered in 2017 – 7.6%, with a significant boost to the national GDP -, again, Brazilian agribusiness is expected to grow in 2018, according to research by Cepea (Center for Advanced Studies in Applied Economics), Esalq / USP, in partnership with CNA (Confederation of Agriculture and Livestock of Brazil). The first estimates for the GDP-volume of agribusiness in 2018 show a high of 5.5% in the year.
Unlike last year’s scenario, in 2018, researchers at Cepea point out that the boost to the sector comes from industrial links, given the stability predicted for GDP-volume of the primary segment. Since the middle of 2017, the Brazilian agribusiness has been reacting to the signs of recovery of the Brazilian economy, albeit modest, and its production and level of employment recovered.
For the input segment, it is estimated a growth of 2.9% in the year and, for the agroindustry, 9%. It is worth remembering that the level of comparison, or the first two months of 2017, is quite low. Researchers at Cepea indicate that the agro-industrial expansion also boosted the agro-services segment, for which an expansion of 6.6% is estimated in 2018, reflecting the large amount of services required for transportation and commercialization of high production.
Still, with regard to the relatively modest performance of the primary segment of the sector, it is worth noting that the variation takes into account the record level of production in 2017. According to Conab, even with the Brazilian grain harvest, declining 2.1% in 2018 year, will still be the second largest in history.
As for prices, current estimates from Cepea / CNA point to a 6.5% loss in relative agribusiness prices, indicating that the sector’s products are depreciating against the average of the economy. As observed in 2017, the downward pressure of the average real prices of agribusiness products ended up suppressing the significant evolution in volume of production and, with this, it is estimated a fall of 1.3% in the GDP of the sector. Among the segments, the reduction of GDP-income is only driven by the primary, for which the decline is estimated at 20.1%. For the other segments, driven by the good volume of production, GDP-income should grow.
Researchers at Cepea point out that the effects of the current truck drivers’ strike, which affect agribusiness, are not yet evaluated in this estimate of GDP. But these issues are likely to have an impact on the performance of the industry (it is not yet possible to assess how much) and can be verified in the next GDP estimates. At first, according to information from Cepea, the poultry, pork and milk sectors, which were already experiencing difficulties before the standstill, seem to be the most fragile in the current strike.
This text was translated by machine from Brazilian Portuguese.