Beef is Sizzling, Coffee's Still Hot
The Brazilian economy faces a challenging year, with limited growth expected in 2015 as the government cuts costs while at the same time boosting taxes. While interest rates are expected to remain high in order to combat persistent inflation, the combination of restricted economic growth in Brazil plus the prospect of rising US interest rates points to further weakening of the real.
For the agribusiness industry, a weaker real may partially compensate for low commodity prices and should further enhance the export competitiveness of Brazil’s animal protein sector. With the high volume of soybean shipments to China in 2014 and a record harvest expected for 2015, logistics development is pivotal to Brazil’s longer-term competitiveness and is expected to be a government priority in 2015. As several of Brazil’s leading agribusiness sectors were significantly impacted by drought in 2014, weather developments in the first quarter will be crucial for production prospects and also for world market prices of key export commodities such as coffee and sugar.
Read the full report for further details on how Brazil Agribusiness is shaping up for 2015.