The Brazilian agricultural sector increased 2.6% between May and June. The result, however, was not enough to prevent the fall in the second quarter of 2018, which was 1.9%. This is shown by the Ipea Indicator of Agricultural GDP, released on Tuesday (07). The positive highlight was the crop, with a high of 2.2%, while livestock increased by 1.9% compared to May.
Compared to the same period in 2017, the second quarter closed down by 2.9%, explained by the behavior of the farming and livestock components, which fell by 2.0% and 4.7%, respectively. “This performance was already expected since the beginning of the year, due to a super-crop in 2017, which was exceptional. So we start from a high base of comparison, “explained the Deputy Director of Macroeconomic Studies and Policies at Ipea, Marco Cavalcanti. For the coming months, a positive contribution from cattle raising to GDP is expected.
However, for the year 2018, Agricultural GDP should decline by 1%, according to Ipea’s projection review, based on estimates by the Brazilian Institute of Geography and Statistics (IBGE) for the Systematic Survey of Agricultural Production (LSPA). This result is explained by falls in agriculture (0.6%) and livestock (2.5%), while the “other” segment is expected to increase by 0.7%.
The trend in agricultural prices in the second quarter was a continuation and increase in the upward movement due to higher external and domestic demand, in addition to the devaluation of the real against the dollar and the relatively narrower supply. The truck drivers’ strike impacted the sector, with effect on the supply and generating a demand dammed in the days following.
“The industry is still undergoing a process of stabilization in relation to freight change. These changes have a different impact depending on the size of the producer and the distance from the production to the distribution centers, “said Ana Cecília Kreter, one of the authors of the study. Soybeans, which are in the commercialization phase, despite showing a recovery in prices – growth of 13.2% in the quarter, compared to the same period last year – did not reach the negotiated volume of 2017.
Exports recorded an increase of 2.4% compared to the second quarter of 2017. “The high price of the dollar ends up contributing to increase the competitiveness of the Brazilian product in the international market. The Brazilian product comes with a lower value compared to other countries, “said Ana Cecília.
A positive highlight was the 61.9% increase in maize grain exports compared to 2017, which was due to the lower comparison basis of the last year. The researcher pointed out that, in 2016, Brazil exported a lot of maize, with a considerable drop in 2017. Meanwhile, the negative highlights are with raw cane sugar, down 21.9%, and chicken meat, 10.7%. In relation to the chicken, Ana Cecília recalled that “the continuity of the embargo by Europe and the fall of sales to Saudi Arabia, Japan and Kuwait explain this negative performance.”
This text was translated by machine from Brazilian Portuguese.