Brazilian exports of agricultural commodities in the whole 2018 are estimated to expand to as much as $102 billion, thanks to the world’s growing city population and resilient demand from China, which is stuck in a trade row with the United States.
The country’s agricultural exports reached $96 billion last year, said Luiz Cornacchioni, director of a farmer group known as the Brazilian Agribusiness Association(ABAG).
But he stressed Brazil should continue to build up its strengths in order to maintain a leading position in the exports markets for agricultural products such as soybeans, coffee, orange juice and chicken.
The agricultural export sector plays a significant role in Brazil’s overall economy, accounting for 23.5 percent of the nation’s gross domestic product and creating about one-fifth of the jobs in the country, Cornacchioni added.
Although Brazilian farmers and especially local soybean exporters have benefited a lot from recent global trade tensions, a truce announced by China and the U.S. lately may compromise Brazil’s trade outlook going forward.
“Rising U.S. soybean stockpiles sparked the truce with China on trade,” Cornacchioni said. “They have nowhere to put it.”
China in 2017 took in about 60 percent of U.S. soybean exports, which was worth $12 billion, but has mostly been buying beans produced in Brazil since applying 25 percent tariff on US soybeans in July to fight against the US for its tariffs on Chinese goods.
Brazilian soybean exports are expected to have a wonderful result in 2018, possibly hitting a record high of 82.5 million tonnes as compared to 68 million tonnes in 2017, according to the National Association of Grain Exporters(ANEC).
Data released by ANEC showed that Brazil exported 80.1 million tonnes of soybean in the first 11 months of the year, up 22.6 percent from a year earlier, while 82 percent of the total, or 65.7 million tonnes went to China.
ANEC also reported that about 2.5 million tonnes of soybeans are scheduled to be delivered in December, more than the shipment of 2.3 million tonnes in December 2017.
The National Association of Cereal Exporters also pointed out that the 2018/2019 planting season came early due to good weather conditions, with some regions due to begin harvesting in the second half of December, “thereby balancing the supply of the market .”
A negative side for Brazil’s soybean exports next year is that China will probably turn back to American soybeans as part of a truce agreed between U.S. President Donald Trump and Chinese President Xi Jinping at the recent G20 meeting in Argentina.