Brazil Agribusiness Outlook 2021

Despite the concerns and uncertainty for this year, the 2021 outlook for Brazilian agribusiness seems positive. International prices are firm, and demand looks robust, even if the pandemic lingers. Another year of good margins for most sectors should boost investments, helping to keep Brazilian agribusiness competitive well beyond 2021.

collage of Brazilian food & agriculture

Report summary

Against the backdrop of a global pandemic and the associated economic and market fallout, Brazilian agribusiness performed remarkably well in 2020. The robust global demand for food and feed commodities boosted Brazil’s agribusiness exports. Field, factory, and port activities adapted to the pandemic and suffered no significant operational problems, while the pronounced devaluation of the Brazilian real – combined with subdued international prices of farm inputs – generated good margins for many sectors.

However, the very dry weather conditions that prevailed in 2020, combined with the high probability of a La Niña event in early 2021, pose concerns about the volume and regularity of rains in central and southern Brazil. This puts a question mark over yields for a range of key crops, such as grains, cane, coffee, and oranges. Given Brazil’s importance as an exporter, these concerns have helped to support the international prices of a range of commodities.

The appreciation of the currency is expected to be limited in 2021, which in combination with the firm international prices, has already created good opportunities for Brazilian agribusiness to lock in favorable local currency prices for 2021’s export sales.

As domestic prices for most commodities reflect export parity, local market prices for many food and feed commodities, which rose sharply in 2020, will remain elevated in 2021. For the animal protein and dairy sectors, this was already an issue in 2020 and remains a point to watch in 2021.

Meanwhile, rising local fuel prices have already sparked talk of a truckers’ strike in February 2021.

Regarding the pandemic, if Brazil is forced to follow other countries in implementing stricter measures to combat further waves of infection during 2021, foodservice and the biofuels sector will again suffer.

  • Andy Duff

    Head of RaboResearch Food & Agribusiness - South America; Global Strategist - Sugar
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  • Andrés Padilla

    Senior Analyst - Beverages, Dairy, F&A Supply Chains
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  • Matheus Almeida

    Senior Analyst – Farm Inputs
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  • Guilherme Morya

    Analyst - Beverages
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  • Wagner Yanaguizawa

    Analyst - Animal Protein
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