December 15, 2011

Global financial crisis may affect Brazilian crop

The next agricultural harvest of Brazil may be affected by the global crisis which is resulting in financial constraints, said Kátia Abreu, the president of the National Confederation of Agriculture (CNA).

Despite the uncertainties, CNA has kept its earnings projections for 2012. The sector is seen posting gross earnings of BRL$318.4 billion (US$169.61 billion) - 8% more than in 2011.

'The biggest risk the agriculture sector will face in 2012 will be a credit shortage, as 65% of the soybean, corn and grain crops are financed by trading companies and Europe-based banks. The Brazilian crop will require BRL$174 billion (US$92.69 billion) in loans next year', Abreu explained on Tuesday (Dec 13).

CNA's pessimism is not restricted to Europe. 'We are concerned about China as well, and hope that it grows at least 8% in 2012, as that country buys 19% of Brazil's agricultural exports', Abreu added.

CNA expects an increase of seven million tonnes in Brazil's 2011/2012 grain crop against 2010/2011, to 170 million tonnes.