With the resumption of activities on the European continent, Brazilian fruit producers expect demand for exports to approach the normal pace in the coming weeks.
This is what shows the weekly bulletin of the Confederation of Agriculture and Livestock of Brazil (CNA), which brings the behavior of prices and production of some crops in the period from June 22 to 26.
According to the publication, in the first three weeks of this month, there was a reduction of 25% in value and 17% in the volume of total exports of fruits compared to the same period of 2019. Papaya is among the fruits most affected by the reduction of commercial flights.
The CNA/Senar System has good expectations in the commercialization of food in the Feira Segura project, which has already occurred in several states and will now be held in the Federal District. The event aims to help producers commercialize their production during the pandemic by providing fresh products. In compliance with health and safety standards, the sale will be made in drive thru mode.
The commercialization of vase flowers should recover with the reopening of the marketing centers in the main capitals of the country. On the other hand, sales of cut flowers still face restricted demand and represent 40% of the total before the pandemic.
The bulletin also brings the concern of the agro-industrial sector in Mato Grosso in the face of the pandemic, which can harm grain export logistics.
Flowers and ornamental plants
The pot flower sector should recover sales with the reopening of the marketing centers in the main capitals. But the cut-flower segment continues with demand restricted to floriculture and garden center customers, and sales currently account for 40% of the volume sold before the pandemic.
Fruits and Vegetables
On June 27, the Feira Segura project takes place for the first time in the Federal District. The initiative, which aims to maintain the supply of fresh food safely to workers and customers, will take place exclusively in the drive thru mode. The CNA/Senar System expects the participation of more than 30 producers.
As for the international market, with the resumption of activities on the European continent, Brazilian fruit producers expect demand to approach normality in the coming weeks.
Brazil recorded a 25% reduction in value and 17% in fruit export volume in the first three weeks of June compared to the same period in 2019. Papaya is among the fruits most affected by the reduction of commercial flights. Cargo planes have been used in return freight by some exporters, which has mitigated the problem despite its higher cost.
In the face of winter and the demand already restricted by the crisis, producers of hardwood vegetables continue in the process of reducing the area, which has ensured a support of prices.
Other vegetables recorded a price reduction throughout the month, linked to seasonal production behavior, while demand has been sustained downwards. In the case of carrots, producers experience low prices due to the pandemic and fear negative margins, because the production of the winter crop has not yet entered the market and may intensify the devaluation.
Onion producers, on the other hand, deal with the reduction in prices in the national market due to the intensification of the harvest in the São Francisco Valley (BA/PE), Irecê (BA) and Cristalina (GO). With the largest domestic supply, the import of Argentina, which was already limited by the containment measures of the neighboring country, practically ended.
The CNA continues to map out the measures that farmers are taking to overcome the economic crisis and the impacts it has caused on the fruit and vegetable sector. As another initiative, it is supporting the research of the journal Hortifruti Brasil of the Center for Advanced Studies in Applied Economics (Cepea), which deals with these issues. To participate, the producer must fill out the form by clicking here.
The activities of the coffee harvest of the 2020/2021 crop continue without major impacts due to the Covid-19 pandemic. Cooxupé, the largest coffee grower cooperative in Brazil, reported that the harvest has already advanced 30% in southern Minas Gerais, followed by the producing regions of São Paulo (22%) and Cerrado mineiro (11%). The behavior is being similar to that observed in years of positive bienniality of culture as the current one.
Poultry and pigs
With the balance between supply and demand balanced, the price of live chicken in the São Paulo market remained stable at R$3.60/kg, as well as in Minas Gerais (R$3.70/kg). Overall, demand for chicken meat has increased in recent weeks and integrators have reported that they have managed to reduce inventories. The shutdown of some refrigeration plants by the Labor Public Ministry has been punctual and has not affected production in general.
In the independent pig market, after consecutive weeks of representative highs, prices remained stable on the santa catarina, São Paulo and Minas Gerais stock exchanges, and with slight increases in Paraná (+1.2%) and Rio Grande do Sul (+0.5%). This is mainly explained by the decrease in the consumption of sausages by the population that migrated to chicken meat.
After the sector's action against low milk prices to producers in Rondônia, a state law was passed that requires dairy products to join conseleite. Companies that do not join will have their tax incentives and benefits suspended.
As for the other Conseleites, the price index of milk paid to producers in July shows an average increase of 12.9%, and Paraná stood out with a variation of +18.3%. The appreciation reflects the high demand for dairy products in recent weeks.
In relation to consumption, dairy products are still valued. The prices negotiated in São Paulo remain heated, both for mozzarella cheese and UHT milk, reflecting the reopening of the sales channels and the release of government aid, added to the low stock of the products.
Prices in the domestic market continue to rise, with @ trading on average at R$215/@ in São Paulo and R$186.90/@ in Mato Grosso. The restricted supply of fat animals continues to make refrigerators pay higher amounts to get animals to maintain operations.
Exports remain warm, which increases demand for animals ready for slaughter. In the face of this, ranchers already register business occurring in the range of R$ 220/@.
In the domestic market there is another movement in consumer prices, with a new appreciation of the front cuts. Married carcass is already sold at R$14.25/Kg, 4% above the previous month's average.
As for the effects of the pandemic, the main refrigerators have signed declarations that their cargoes are free of Covid-19, remaining enabled for export. While the refrigeration plants act to remain operational, the Public Ministry of Labor of Rondônia has again closed the JBS of São Miguel do Guaporé until the company complies with all obligations to prevent the spread of the new coronavirus.
Regarding the vaccination campaign against foot-and-mouth disease, the northeastern states extended the deadline to carry out vaccination until July 31.
Sindirações released a report that shows that feed production for aquatic organisms grew 6.4% in the first quarter of the year. This result reflects the record in tilapia settlement, especially in cooperatives in Paraná, which increased slaughter capacity to meet the high demand of brazilian consumers for fish, especially for white fillets. Shrimp feed production, on the other hand, suffered a strong decrease in the period, caused by the decrease in stand during the pandemic.
– Donald Trump's administration plans to announce a plan to renegotiate its consolidated tariffs in World Trade Organization (WTO) agreements. The action could affect allies such as Brazil and India. It is not yet clear whether the goal is only to renegotiate consolidated U.S. import tariffs or whether the U.S. government wants a broad renegotiation of tariffs in general involving other countries (Valor Econômico, June 17, 2020).
– The European Commission has put forward a proposal to prevent foreign companies that have received significant donations, loans, tax credits or other forms of State aid from quiquiting European companies or competing with them for certain contracts within the EU (Economic Value, 17 June 2020);
– The German Ministry of Food and Agriculture (BMEL) has established pilot projects aimed at modernizing German agribusiness. The initiative involves the allocation of 50 million euros, in three years, to institutes that will develop research in local producer associations (Agribusiness Promotion Division-II (DPA-II) – MRE);
– The European Court of Auditors published the report entitled "Biodiversity on Farmland: CAP contribution has not halted the decline", which assessed the contribution of the Common Agricultural Policy (CAP) to the preservation and promotion of biodiversity in the EU and brought recommendations for cap reform and the implementation of the new biodiversity strategy. The report states that the CAP would not have been efficient in halting decades of biodiversity loss in the EU. Intensive agriculture would be one of the main causes of biodiversity loss in the bloc. The report also recommends that the European Commission improve the coordination and design of the post-2020 biodiversity strategy and monitor its expenditure more accurately (Agribusiness Promotion Division-II (DPA-II) – MRE);
– The government of Germany decreed mandatory quarantine in the city of Gütersloh last Tuesday (24). The measure will be valid until June 30. It's just that about 1,500 employees at a local refrigerator tested positive for Covid-19. The so-called lockdown will affect more than 500,000 people living in the region (Politico, June 23, 2020).
– China raises the coronavirus alert in Beijing. A large number of flights in and out of the capital have been cancelled. In addition, residential communities will face tighter controls, especially on public transportation. The change occurs when the city tries to contain a set of infections associated with a wholesale market for meat and other products (Valor Econômico, June 17, 2020);
– According to importers and the "Beef to China" consultancy, due to a new outbreak of Covid-19 in the food market in Beijing, the General Administration of Customs of China implemented, on June 13, nucleic acid testing procedures for Covid-19 in shipments of food products arriving in Chinese ports (Agrobusiness Promotion Division-II (DPA-II) – MRE);
– Customs authorities are inspecting all containers landed in Chinese ports containing fish, shrimp and meat. The load is only released after receiving certificate attesting that it has passed inspection. All imported foods can only be marketed by presenting a certificate of origin and proof that they have undergone the test procedure to detect Covid-19 (Agribusiness Promotion Division-II (DPA-II) – MRE);
– The Ministry of Agriculture and Rural Affairs of China (MARA) published on June 23 the new list of genetically modified organisms (GMOs) that had approved or renewed import safety certificates. The events approved for the first time were the insect-resistant soybean variety MON-87751 (Bayer) and the herbicide-resistant soybean DBN-09004-6 (Beijing Dabei Agricultural Biotechnology). The MON-87751 is the second generation of Intacta technology and has already been approved for production and commercialization in Brazil. The DBN-09004-6 was developed by a Chinese company and, as reported by the private sector, will be marketed in Argentina. Both certificates are valid until June 11, 2025 (Agribusiness Promotion Division-II (DPA-II) – MRE);
– Import authorisations for the following events were also renewed until 11 June 2025: mon-87427 (Bayer) and DAS-40278-9 (Corteva) herbicide resistant maizes; maizes resistant to insects 5307 (Syngenta) and MIR-162 (Syngenta); maize resistant to herbicides and insects Bt11xGA21 (Syngenta); and soybean resistant to herbicides MON-87705 (Bayer) (Agribusiness Promotion Division-II (DPA-II) – MRE);
– The new wave of contamination in Beijing has led China's health authorities to adopt more restrictive measures for the fresh food and frozen meat sector. The local government has also stepped up surveillance in the capital's markets and fairs. In Brazil, the concern is that these new measures could impact animal protein exports (Valor, June 24, 2020).
– The inconclusive closure of the fourth negotiating round between the United Kingdom and the European Union, added to the prospect of the new stage of trade negotiations between London and Washington in the coming weeks, it has again aroused concerns among local agricultural producers who fear that British negotiators will agree to reduce tariffs and sanitary standards related to imports of North American agricultural products (Agribusiness Promotion Division-II (DPA-II) – MSR).
– Japan's exports fell more than expected in May, showing the continued effects of the Covid-19 pandemic on the country's main growth mechanism. Japanese exports fell 28.3% in May, a number higher than in the same month before (Valor Econômico, June 17, 2020);
– The Japanese Central Bank has expanded the economic aid package for companies affected by the pandemic to $1 trillion. The amount includes purchases of corporate securities and commercial securities (Economic Value, June 16, 2020).
– The Argentine productive sector has complained about the actions of the current government that has practiced greater exchange rate restrictions, increasing the number of taxes on exports and expropriations of companies, as is the case of vicentín agricultural trading, which is now part of the state-owned YPF Agro (Valor Econômico, June 17, 2020);
– Argentina's National Food And Drug Service (Senasa) has issued a danger alert on the border with Rio Grande do Sul due to the advance of a locust cloud that has been monitored since May by the neighboring country. The cloud originates from Paraguay and arrived in the province of Santa Fe on June 17. The most affected crops so far have been corn, cassava, wheat and oats, mainly affecting small producers. To monitor and record the evolution of the pest, a contingency protocol prepared by Senasa, Inta and provinces was activated. The current procedure manual is 2018. According to press reports, a meeting of the National Crisis Committee was also held this week to assess the situation and the actions to be taken, which was attended by the Minister of Agriculture, Livestock and Fisheries, Luis Basterra (Ministry of Agriculture and Livestock of Brazil – Mapa).
– The advance of Covid-19 in the interior of Mato Grosso has worried representatives and workers in the agro-industrial sector. The state is the largest Brazilian grain producer. The cities of Sorriso, Nova Mutum and Lucas do Rio Verde already account for more than 1,100 patients. The three municipalities are important agricultural centers. Farmers fear that the increase in the number of cases could affect the planting of the second crop of corn and cotton. Mandatory isolation measures – the so-called lockdown may also impact grain export logistics. A study by the Federal University of Mato Grosso (UFMT) projects that the state will have more than 300,000 cases by September (Valor, June 25, 2020).
– According to WTO statistics, the volume of trade in goods decreased by 3% compared to the previous year in the first quarter. Initial estimates for the second quarter, when pandemic-related blockade measures affected a large portion of the global population, indicate a year-on-year decrease of about 18.5%. According to the director general, Roberto Azevêdo, "the drop in trade that we are seeing now is historically large – in fact, it would be the sharpest on record. But it could have been much worse" (WTO);
– Political decisions have been crucial in esomenting the ongoing blow to production and trade and will continue to play an important role in determining the pace of economic recovery. For production and trade to recover in 2021, all fiscal, monetary and trade policies will need to continue in the same direction (WTO);
– In light of the commercial data available for the second quarter, the pessimistic scenario of the April forecast made by the Organization seems less likely, as it implied sharper falls in the first and second half (WTO);
– The outlook for the global economy over the next two years remains highly uncertain. Growth for trade in 2021 could approach 5%, which would leave it well below the pre-pandemic trajectory. On the other hand, a rapid return to its trajectory before the pandemic would imply commercial growth in 2021 of around 20% in line with the optimistic scenario of the April forecast (WTO).