April 9, 2024
Brazil's Mato Grosso faces billions in losses amid decline in grain production
A recent report by the agricultural economics institute Imea found that Mato Grosso, Brazil's leading grain-producing state, may encounter a substantial decrease in gross production value this year, amounting to BRL 53.9 billion (US$10.6 billion), marking a 26.62% drop from 2023, The Brazilian Report reported.
Last year's record harvests, which exceeded market expectations and boosted the country's GDP, will not be replicated this year. Extreme weather conditions are anticipated to significantly reduce productivity in key production areas, as highlighted in Agroconsult's latest report on soybean production.
Imea's projections suggest a 31.11% decline in soybean production for Mato Grosso, resulting in a gross production value of BRL 67.16 billion (US$13.3 billion), marking the first decrease since 2013.
The outlook for corn is even more pessimistic, with an expected 39.31% decrease, leading to a gross production value drop from BRL 40.64 billion (US$8 billion) to BRL 24.67 billion (US$4.9 billion)
Notably, Mato Grosso's cotton, livestock, and pork production are also anticipated to decrease, with poultry being the sole exception.
Brazil has been experiencing record trade balance surpluses since March last year, primarily driven by increased production volumes that offset the global decline in commodity prices during the pandemic.
While many analysts view this shift in Brazilian foreign trade as structural, expecting continued surplus behaviour, fluctuations in global prices are still expected to impact the country.
- The Brazilian Report