Political crisis puts agribusiness on high alert; producers fear high dollar – Prime Time Zone

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An expert says that the scenario is one of ‘winners and losers’, with a positive result in exports and a negative result for the domestic market, which suffers from increased inputs

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Food in Brazil, which was no longer cheap, became even more expensive because of the current political crisis. The sector of agribusiness is on high alert, producers of rice, beans, vegetables, fruits and vegetables fear the rise of the dollar. According to Marcos Janker, professor at the São Paulo Education and Research Institute (Insper), the risk is of losses if nothing is done. “Yes, it is worrying, all sectors are concerned and agribusiness has to be very concerned because it depends on working roads, railways, ports and even domestic supply. This insecurity is not good for anyone”, he points out. The weakening of the real and new highs in the inflation are the first symptoms of the increase in food price. The National Confederation of Agriculture (CNA) says that, in the last 12 months, the price of food has accumulated an increase of 15.27%. A week ago, the 60-kilogram sack of Rio beans was on average R$ 276, which represents an increase of 40% compared to last year, according to the Instituto Brasileiro de Feijão. In Paraná, the largest bean-producing state in the country, the cost increased by 34%, according to the Agriculture and Supply Secretariat (seab). A bag of food used to cost R$71 in 2020, now it is over R$95.

Faced with political uncertainty, there are two sides to be considered in the agribusiness sector. Exporters are celebrating the numbers. Now, those who work in the domestic market are suffering from the rise in inputs, as everything is based on the dollar rate. And there is still one more crisis to be stopped: the water, which also directly impacts business, explains Marcos Janker. “As with the entire economy, Covid-19 has produced both winners and losers. The retail sector, supermarkets grew, food in the home grew. But the part of restaurants, food outside the home fell. Within agribusiness, those who export did well, but those who work only in the domestic market or who need products quoted in dollars ended up being harmed.”

“There was also an important increase in the cost of inputs, especially fertilizers, the price of land also increased. There is a lot of difficulty in acquiring machines, so I would say that the scenario is one of winners and losers”, adds Janker. From next September 15th, the new agribusiness harvest season begins. The estimate of the National Supply Company (Conab) is for a harvest equal to or greater than 290 million tons. The numbers include soybeans, corn, cotton, rice and beans.

*With information from the reporter Maicon Mendes