Brazil Agribusiness Quarterly Q2 2022

Here are the main highlights for some of Brazil’s key agribusiness sectors. The full report provides a complete outlook for all sectors and the developments to watch in the upcoming weeks.

Highlights include:

- We project a BRL/USD of 5.25 by the end of 2022. After the positive performance in Q1 2022, we see depreciation risks ahead, only diminishing by year-end. A partial reversal could take place in Q1 2023. - The Brazilian 2022/23 coffee harvest has started, but delays have been reported. Brazilian coffee demand remains resilient in 2022, but higher retail prices should limit consumption.

- The next grain season should see a significant increase in production costs, especially for fertilizers. Despite this, it is still possible for farmers to achieve adequate operating margins.

- Recent fuel tax cuts will trickle down to ex-mill ethanol prices in the coming weeks, but the extent and duration of the decline remain unclear. Meanwhile, average cane yields to date have not increased from last season.

- Despite a 10m metric ton decline in soybean exports during 2021/22, crushing is projected to reach a record of 49m metric tons.

- A record crop of 113m metric tons will favor corn exports, which will likely reach a record of 42m metric tons in the 2021/22 season. High freight costs will likely limit the pace of corn exports during 2H 2022.

- Challenging logistics and a weakening economic environment might limit global cotton demand, despite the second largest Brazilian cotton crop on record.

- Orange juice prices remain at elevated levels as inventories are at five-year lows and there is uncertainty regarding the supply’s recovery in 2022/23. Initial forecasts for the upcoming crop in São Paulo signal 317m boxes, up from 262m in 2021/22.

- Heated exports, a seasonal reduction in rainfall, still-high food costs, and increased demand from slaughterhouses support live cattle prices, which are starting to recover in some regions.

- Low supply continues driving milk prices higher. Prices are expected to remain elevated in July and possibly August before some reversal as supply and imports accelerate in Q3.

- Global pulp prices are at record-high levels after sustained supply-side disruptions and firm demand. However, conditions are right for some price declines in 2H 2022 as the supply increases and the global economic outlook worsens in key consuming markets.

Download previous editions

  • Andy Duff

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

    Senior Analyst - Beverages, Dairy, F&A Supply Chains
    Read more
  • Guilherme Morya

    Analyst - Beverages
    Read more
  • Marcela Marini

    Senior Analyst – Grains & Oilseeds
    Read more
  • Bruno Fonseca

    Senior Analyst – Farm Inputs
    Read more
  • Wagner Yanaguizawa

    Analyst - Animal Protein
    Read more