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Agribusiness expected to grow in 2023

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Vincent

The Brazilian agribusiness has something to celebrate this Christmas. It was a year in which the sector reaped positive results despite the climate, high inflation, the drop in consumers’ purchasing power, high-interest rates, electoral tension on the domestic front, and the turbulence caused by the war in Ukraine and by Covid (especially in China) abroad. Almost all of these factors will be present when 2023 begins, and estimates indicate that profit margins will shrink in agriculture. But the big picture indicates that cloudiness may not stand in the way of new production and export records.Even with a cooling trend in agricultural prices, still high costs and expensive credit, the Brazilian Confederation of Agriculture and Livestock (CNA) estimates that the GDP of national agribusiness will grow by 2.5% in 2023, after a fall of 4.1% this year, directly influenced by weather problems that knocked down the soybean harvest in the South and also affected perennial crops. The confederation is concerned about the future of fiscal responsibility in the country, the direction of the new government’s policies for the sector, including environmental policies, and the expectation of lower global growth. But bountiful harvests promise to boost agribusiness.Despite new climatic problems in the South, the National Supply Company (Conab) projects the production of grains at 312.2 million tonnes in this 2022/23 season, 15% higher than in 2021/22, largely thanks to the recovery of soybeans. Increases are also expected for the coffee, sugar cane, and orange harvests, and all this will reflect on the Gross Value of Production (GVP) of Brazilian agriculture and livestock next year. According to the Ministry of Agriculture, the total GVP will reach R$1.257 trillion in 2023, 6% more than this year, when there was stability. For crops, headed by soybeans, the projection is for a high of 7.4%, to R$873 million.But if in 2022 the prices compensated for the volumes lost due to climatic adversities, next year the situation may reverse, at least as far as the current signs are concerned — and ruling out more serious problems caused by cold weather in the U.S. and drought in Argentina. And even with the forecast of falling costs after the recent records, farmers will have to stay alert. In the chains that partly depend on biofuels...

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