According to Cepea, Brazilian agribusiness has been showing a reaction since the second half of 2017
Brazilian agribusiness is expected to grow by 3.17% in GDP-volume in 2018, according to data from the first quarter of the year, analyzed by Cepea (Center for Advanced Studies in Applied Economics), Esalq / USP, in partnership with the Confederation of Agriculture and Livestock of Brazil (CNA). In 2018, the boost to the sector comes from industrial links, given the relative stability predicted for GDP-volume of the primary segment.
According to researchers from Cepea, as mentioned in the previous report, Brazilian agribusiness has been showing a reaction since the second half of 2017, influenced by signs of recovery in the Brazilian economy. It is important to evaluate that, even with an evolution in volume presented by the agribusiness as a whole, this movement has not been accompanied at the same pace by the evolution in occupations in the labor market of the sector, with the exception of agroindustry, which had more expressive growth in production and employment.
As for prices, current estimates point to a 7.6% loss in relative agribusiness prices, indicating that the sector's products are depreciating against the average of the economy. As observed in 2017, the downward pressure of the average real prices of agribusiness products ended up suppressing the significant evolution in volume of production and, with this, it is estimated a fall of 4.7% in the annual GDP of the sector. Among the segments, the reduction of GDP-income is especially pressured by the primary, for which the decline is estimated at 19.1%.
It should be noted that, as the variation is calculated from the comparison between the prices of the first quarter of 2018 and the quarter of 2017, the expressive drop is also linked to the fact that this quarter was the higher prices in 2017. Then, as the annual comparison starts to include more months (in the next estimates of GDP), it is estimated that the negative rate will have its magnitude diminished or even slightly reversed. This assessment is further reinforced by the prospect of price increases for some agribusiness products in the coming months, such as cotton, corn, soybeans, wheat and fruit and vegetables.