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Agribusiness exports during coronavírus pandemic

Since December 2019, when first coronavirus cases had been registered in China, the disease has spread to several countries, and, in March 2020, the World Health Organization (WHO) declared covid-19 a pandemic. In order to fight the coronavirus spreading and its impacts on the health of the population, the governments of countries have adopted measures to limit the circulation of people and goods.

 

Limited economic activities, in turn, have led the International Monetary Fund and governments to revise down projections of an increase in the global economy, with consequences on world trades, which may decrease in 2020 compared to the year before.

 

China was the first country to declare quarantine in three cities: Wuhan, Huanggang and Ezhou. Activities temporarily stopped in the period and, because of that, comparing the two first months of 2019 with the same period this year, decreases were 13.5% for industrial production and more than 20% for sales in the retail market, according to the National Bureau of Statistics of China. As a result, the country has also reduced the pace of imports in 4% and of exports, in 17% from January to February/2020. In March, decreases were less intense: 0.9% and 6.6%, respectively. In April, China is likely to return to the regular scenario, in case there are no new infection waves.

 

Although players claim that activities were halted at Chinese ports in early 2020, the Brazilian share on exports to China surpassed 28%, a record for the period, according to data from Secex. Soybean trades, an important sector of agribusiness, favored this result.

 

As for Chinese imports of Brazilian agribusiness products, the volume decreased in January and recovered in February and more significantly in March. From January to March, Brazilian agribusiness exports surpassed 21 billion USD, close to that registered in the first quarter of 2019 (only 0.4% down). Still, China kept its share of 34% in the total, similar to that verified in 2019. Other countries that also face the disease spreading and keep restraining measures for the economy, namely those in the European Union and the United States, also kept their participation in purchases of Brazilian products at 17% and 7%, respectively.

 

Soybean products accounted for 35% of international sales from January to March, followed by meat (almost 19%), forest products (13%), sugar (almost 7%) and coffee (6%). The revenue obtained with soybean and forest products, coffee and textile exports were higher in the first quarter of 2020 compared to the same period in 2019.

 

The agribusiness is an essential sector of the economy, and projections for 2020 are more encouraging compared to other sectors. The crop of important products, namely soybean, which may have a record production, and the supply of others, such as sugar, corn and coffee, may be high.

 

As a result, international agribusiness sales may recover throughout the year, which had already been verified in March, with the gradual return of activities in China and as major partners are able to control advances of covid-19. The revenue obtained with exports of soybean products is expected to surpass that registered last year, according to the USDA.

 

In March, some markets opened, specially meat, due to an effort of the Ministry of Agriculture to guarantee the domestic supply and increase international sales, even during the pandemic.

 

However, the sectors of fruits and meat may face difficulties in the short-term, especially regarding logistics, given that players who work at ports have reported problems with the availability of refrigerated containers.

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