In the first semester of 2010, the Brazilian agroindustry grew 6%, a much higher result compared with the one obtained in the same period of 2009 (-5.3%), but lower than the one registered by the general industry average (16.2%)...

In the first semester of 2010, the Brazilian agroindustry grew 6%, a much higher result compared with the one obtained in the same period of 2009 (-5.3%), but lower than the one registered by the general industry average (16.2%). The agricultural sectors (4.4%), with the largest contribution in the agroindustry, presented a development similar to that of the livestock sector (4.3%). The sub-sector of insecticides, herbicides and other agrochemical products advanced 34.1% and the wood sector, 23.8%.

The 6% growth in the agroindustrial production is due to the record harvest in 2010, the slight increase in the volume and exporting prices of some commodities and the recovery of the agricultural machinery and equipment manufacturing sector. It is also relevant to highlight the low contrasting basis in the first semester of last year, caused by the international economical crisis at the end of 2008, which led to the decrease in exports and international prices. The positive scenario for agroindustry and the increase in the agricultural income stimulated investments on the sector, with great reflection on agricultural machinery and equipment (50%), manure and fertilizers (3.1%) and agrochemical products (34.1%).

In a quarterly basis, the agroindustry presented positive results in the first two periods of 2010. After growing 5.2% in the first quarter of the year, the agroindustry accelerated the growth pace in the second one (6.7%), propelled by the improvement in agriculture, which changed from 2.6% to 5.5%, as well as by the increase in livestock production (from 2.8% to 5.8%).

The result of the first semester of 2010 for the agriculture was positively influenced by the good climate conditions, opposite from last year, when there was a drought in the South Region, the main productive region of the country. According to the Systematic Survey of Agricultural Production (LSPA) of July of 2010, this year grain harvest estimate is of approximately 146.4 million tons, a 9.2% higher result compared with the one in 2009 (134 million tons) and 0.3% higher compared with the record harvest of 2008 (146 million tons).

In relation to the external sector, according to the Foreign Trade Secretariat SECEX/MDIC), the exported volume of the main agroindustry products presented the following changes in comparison with the first semester of 2009: leather and hides of bovine (17.1%), cellulose (8.3%), frozen beef (5.3%), poultry meat not cut in pieces (2.5%), sugar (0.9%), soybean bagasse and extraction residuals (0.9%) and poultry cuts and edible offal (0%). On the other hand, exports of alcohol (-54.2%), tobacco (-24.7%), crude soybean oil (-13.5%) and ground soybean (-4.2%) recorded a decrease.

Industrial agricultural products

The sector of industrial agricultural products grew 2.6% in the first semester of 2010, with positive results in five of the eight surveyed sub-sectors. The increase in sugar cane products (15.7%) can be explained by the expansion in the production of sugar (20.1%) and alcohol (11.9%), this last one propelled by the internal market growth due to the increase in the number of bi-fuel vehicles. Other positive contributions were from soybean products (2.8%) and wheat (1.5%), both stimulated by the harvest growth; orange (35.7%) and cellulose (2.7%). Conversely, the negative contributors were rice (-7.6%), due to the excessive rainfall in Rio Grande do Sul, the major producer; tobbaco (-11.2%) and corn (-4.5%).

Industrial products used in agriculture

The sector of industrial products used in agriculture advanced 18.9%, mainly due to the increase in the manufacturing of agricultural machinery and equipment (50%) and manure and fertilizers (3.1%). This sector was influenced by the expansion of the agricultural income, resulted from the higher harvest in 2010, and by the slight increase in the prices of some commodities. Thus, the investment in tractors and harvesters and the use of manure and fertilizers, critical items for the agricultural production growth, were expanded in these first six months of the year. The external sector also contributed to the expansion of the agricultural equipment production, with increases in harvesters (17.5%) and wheeled tractors (2.8%) exports, according to the estimates of the National Association of Motor Vehicle Manufacturers (ANFAVEA).

Industrial livestock products

The sector of industrial livestock products advanced 3.4% in the first six months of the year. In this group, the poultry products increased 4.6%, mainly due to the internal market and slight recovery of exports. The cattle, hogs and pigs products fell back 0.9%. The production of milk, a product mainly aimed at the internal market, grew 5%, whereas leather and hides expanded 14.8%, mainly influenced by exports.

Industrial products used in livestock production

The sector of industrial products used in livestock grew 7.5% in the year, propelled by the expansion of 11.2% in the group of animal food and vitamin supplements, the greatest contributor to the sector, as the group of veterinary products decreased 5.7%.