Agriculture industry grows 4.2% in Q1 2008
August 06, 2008 09h00 AM | Last Updated: August 21, 2018 10h02 AM
In the first semester of 2008, agriculture industry in Brazil grew 4.2%, at a similar rate to that of the same period in 2007 (4.8%), and below the rate of national industry (6.3%). The good performance of agriculture industry is related to the increase of the harvests, to the bigger consumption of the internal market, due to the increase of income, and to a favorable economic scenario to agriculture, with increase of the exported volume and rise of prices. According to this IBGE survey, these factors also contributed to the increase of income in the sector and to the investment in agricultural machinery and equipment (43.5%), fertilizers (10.3%) and animal food (7.5%). The low increase of livestock (1.6%), which is related to the embargo against the export of Brazilian beef to the European Union, strongly affected the production of derivatives of beef and pork (-3.7%).
The growth of sectors related to agriculture (3.2%), of major importance to agriculture industry, surpassed that of the sectors related to livestock (1.6%). The group insecticides, herbicides and other substances for agricultural use had significant increase (46.6%), due, mainly, to the increased production of soybeans, sugarcane and corn, crops which make use of these products to a large extent. Wood, on the other hand, declined 24.2%, affected by the fall of exports.
On a quarterly basis, agriculture industry had positive results in the first two periods of 2008. After having increased 6.1% in the first quarter, the sector faced deceleration in the second one (2.8%), due to the reduced increase of rhythm of agriculture, which changed from 6.9% to 0.8%, whereas the opposite happened to livestock (from –1.0% to 4.4%).
In the semester, the good result of agriculture was positively affected by favorable climatic conditions and by the increase of the use of protective substances and fertilizers, which contributed to the increase of productivity. The Systematic Survey of agricultural Production (LSPA) estimated for 2008 a record harvest of 143.6 million metric tons of grains, a result 7.9% above that of 2007 (133.1 million metric tons), being the highlight the production of soybeans, corn and rice, accounting for 90% of the harvest.
The annual increase of food consumption, stimulated by the good performance of the economies of developing countries, the production of biofuel, the rise of international prices of farm products and the growing presence of Brazilian farm products in external markets have contributed to the increase of exports1.
Industrial products from agriculture
The subsector of industrial products from agriculture grew only 0.60%, even with the positive results observed in six of the eight subsectors surveyed. The good performance of soybeans derivatives (6.0%) occurred due to the increase of harvests and the rise of prices, due to the bigger external and internal demand. It is worth mentioning that soybeans, besides being an input to the production of animal food and edible oil, have been used in the production of biofuel. The little increase of sugarcane derivatives (0.4%) is a consequence of the reduced production of crystallized sugar (-10.8%), due to the use of almost all the sugarcane crop in alcohol production due to the better prices of this fuel. The alcohol production, with increase of 10.4%, was stimulated by the bigger internal demand, due to the increase of the fleet of double-fuel vehicles and to the increase of exports (32.1%). Other positive contributions came from cellulose (11.2%) and oranges (0.5%), produced well-accepted in the foreign market and corn (1.1%), the basic input to the production of animal food and aviculture and pig raising. The only decreases which affected the overall rate of this group were tobacco (-10.6%), due to the decrease of exports and wheat (-12.4%).
Industrial products used by agriculture
The sector of industrial products used by agriculture had increase of 20.9% due to the bigger production of fertilizers (10.3%) and of machinery and equipment (43.5%). This result was affected by the increase of agricultural income, due to the high prices of agricultural commodities and of the record grain of 2007. Having more capital, agricultural producers were able to invest in machinery and equipment and also buy fertilizers, which are essential to the increase of agricultural productivity. Exports of equipment were also relevant to the increase of this subsector2.
Industrial products used in livestock
The sector of industrial products from livestock grew 0.6%. Poultry derivatives fell 3.3%, affected by exports due to the continuation of good international prices. The main importers of chicken meat are the countries located in the Middle East, Asia (except Middle East) and from the European Union. Products generated by cattle livestock fell 3.7% due to the reduction of the exported amount. The production of milk, a product directed to the internal market, increased 3.3%; leather and rawhides decreased 3.8%.
1According to data from the Bureau of International Trade (SECEX/MDIC), in 2008, the exported volume of the main agricultural products of industry changed as follows: poultry meat and giblets (11.8%), meat of hens and roosters not cut in pieces (16.5%), frozen beef (-21.9%), frozen pork (-0.6%), alcohol (32.1%), sugarcane sugar (-5.3%), cellulose (4.1%), tobacco (-8.5%) and sawed wood (-25.3%). In the group of soybeans, the export of goods increased 8.0%, whereas bagasse and other residues from the extraction of soybean oil (-2.8%) and of crude soybeans oil decreased (-5.6%). It is worth mentioning that revenue from exports of these soybean derivatives, due to the rise of international prices, grew by 69.8%, 54.9% and 67.9%.
2According to statistics of the National Association of the Manufacturers of Automotive Vehicles (ANFAVEA), the exported amount of harvesters and wheel tractors grew, respectively, by 68.8% and 28.1%.