Brazil Agribusiness Quarterly Q3 2021

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:

- Fertilizer prices are expected to remain firm until at least the end of 2021, supported by strong demand, uncertainties regarding supplies, and high prices for agricultural commodities.
- Preliminary expectations for the 2022/23 Centre/South cane crop are for only a partial recovery; rainfall in Q4 2021 and Q1 2022 will be crucial to next year´s crop prospects.
- Supply problems, especially in Brazil, should support coffee prices. Rabobank forecasts December/2021 contracts in a range of USD 1.66/lb to USD 2.05/lb at ICE/NY.
- Soybean planting for the 2021/22 crop has started and weather patterns need to be monitored as, according to IRI, La Niña has a 78% chance of developing in the fourth quarter of 2021.
- Crop losses in 2020/21 will limit corn exports from Brazil. Corn exports are expected to be 50% lower in 2020/21compared to 2019/20.
- In addition to the end of the cotton harvest in Brazil, increasing freight costs and container availability are limiting cotton exports in the 2020/21 season.
- Beef supply is improving with the arrival of feedlot cattle, creating some downward pressure on live cattle prices. This, plus rising prices for poultry meat has improved the competitiveness of beef in the local market.
- Latest estimates confirm that the current 2021/22 orange crop in São Paulo will be similar in size to 2020/21 at around 260m boxes. Juice prices should move higher on supply constraints and lower inventories. 
- High inflation and slow economic growth have reduced dairy demand strength, while processors are facing high farmgate milk prices and low margins with most inputs at high prices.
- Global pulp prices have seen a moderate correction after the highs of April during the slower summer months in the Northern Hemisphere. The market is well-balanced as new capacity in South America is being gradually added.
- We forecast the BRL at 5.20 by end-2021. Despite the better perspectives for the pandemic and for economic recovery, uncertainty about political consensus on economic reforms caps the potential for BRL appreciation.

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  • 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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  • Guilherme Morya

    Analyst - Beverages
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  • Marcela Marini

    Senior Analyst – Grains & Oilseeds
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  • Wagner Yanaguizawa

    Analyst - Animal Protein
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