Last year, exports of Brazilian agribusiness products set a new record: US$ 159 billion. This figure is 32% higher than the 2021 result and 64% higher than what was traded in 2019, the year before the pandemic.
There was little change regarding products and destination countries, but the 2022 agro export Christmas basket brought some noteworthy new features, such as significant increases in corn sales and purchases from India.
The conflict between Russia and Ukraine has affected the world grain market, with a decrease in global supply and a consequent increase in prices. The impact on Brazilian exports can be measured by the 197% increase in corn sales to the world. Due to this result, the product was the second most traded in the agro sector in 2022, behind only soybean and surpassing the exports of beef and sugarcane, for instance.
Besides corn, sales of wheat and soybean oil also grew well above average: 241% and 107%, respectively.
About India, the country jumped from the 22nd position in the 2021 main destinations’ ranking to the 9th position last year. This was mainly due to the increase in soybean oil purchases. In total, Indian purchases of Brazilian agricultural and livestock products grew by 128%. Iran and Colombia also rose in the ranking, with purchases, increasing by more than 100%.
The Indian market deserves special attention from Brazilian agribusiness. Two factors drive the increase in demand for food: demographic and income growth. With 1.4 billion inhabitants, this year India will surpass China and will become the most populous country in the world. In economic terms, India is estimated to grow by 6.1% in 2023, more than China and the world average.
Speaking of China, the country remains, by far, the main destination for Brazilian agro exports. The US$ 50.8 billion bought by the Chinese in 2022 are more than the sum of the purchases of the European Union (EU), the United States, Iran, Japan, and Thailand, markets in the 2nd, 3rd, 4th, 5th, and 6th positions in the main destinations’ ranking. It is relevant to note that, despite the imported worth increase, the Chinese market share in the total sold by the sector had a small decrease, from 34% in 2021 to 32% in 2022.
As expected, the growth of Chinese demand for agricultural and livestock products has been slowing down. It is expected that, in the next decade, the annual increase will be 0.6%, much lower than the 2.3% in recent years. This effect has already been felt in 2022, when the volume of soybean grains imported by China from Brazil was 11% lower than in 2021. The Chinese buy more than 68% of all Brazilian soybean grains sold to the world.
Due to its economic and geopolitical relevance, what happens in China has impacts on the rest of the world. In 2022, the growth of the Chinese economy was 3%, well below the 8.1% of 2021, and the IMF forecasts that this year this figure will reach 4.4%. It is still lower than what China has recorded in recent years, but above the 2.7% that the Fund foresees for the world economy.
Besides China, other issues that will continue to affect international agricultural trade in 2023 are the war between Russia and Ukraine, the occurrence of extreme weather events that impact production and consequently the global food supply, and the slowdown in the global economy’s growth.
Another issue that has been gaining momentum for some years and will be at the heart of discussions in 2023 will be the implementation of measures establishing environmental requirements for agricultural products’ importation. The EU, the United Kingdom, and the United States are the markets with the most advanced debates.
The global scenario remains with a series of uncertainties; therefore, the “crystal ball” has an opaque vision of how international agro trade will really behave and how Brazil will be affected. What is certain is the need for increased efforts, both from the government and the private sector, for the country to continue increasing its share in the global market. Trade opening, diversification of agenda and destination countries, expansion of the export base, and policies to foster exports will remain essential for the country’s growth.
Sueme Mori is the Director of International Relations at the Brazilian Confederation of Agriculture and Livestock (CNA)
*This article was originally published in Broadcast.