After a tumultuous 2021 in product supply and with repercussions on prices, 2022 will still be subject to instabilities in production and price volatility.
The reflexes of this year’s “almost biblical” phenomena, affected by drought, frost and fires in crops, will still be felt in the next. The macroeconomic situation will also require caution.
The assessment was made by analysts at Rabobank, an agribusiness bank, and was made this Wednesday (10) during the presentation of perspectives for Brazilian agribusiness in 2022.
This year was marked by higher-than-expected inflation, production bottlenecks, expensive inputs, high global freight rates and unfavorable weather conditions. The result was a rise in food prices to the highest level in a decade.
A good part of these problems will also be reflected in the next year, a period of elections. Inflation should stay at 4.3%; interest will rise to 10.5%; the exchange rate will remain at 5.61%; and the GDP (Gross Domestic Product) will have an evolution of only 0.8%.
In addition to interfering with the cost of food, the 2022 field scenario may also affect transport costs, as the sugarcane crushing will not be far from this year’s 525 million tonnes in the central-south region.
Sugar production, according to the bank’s expectations, will be 33.2 million tons, up 2%, and ethanol, 28.2 billion liters, up 3%.
The price of ethanol at the mills, negotiated at R$ 3.40 this year, could reach R$ 3.80 next year. Gasoline, due to a price of BRL 80 per barrel of oil in 2022, will be at BRL 6.40 per liter at the pumps.
Consumers will continue to pay more for coffee as well. This year’s bullish factors extend into the next.
For now, however, there are uncertainties about how the coffee growers will manage the crops affected by the frost –types of pruning– and about how the recovery of the coffee trees will be.
World consumption grows, totaling 168.6 million bags, causing a deficit of 3.5 million tons between global consumption and supply in the 2020/21 harvest.
Brazilian production will be 63.5 million bags in the 2022/23 harvest, above the previous one, but below the 72 million bags in 2020/21, according to Rabobank.
Brazilian soy production will reach 142 million tons. The increase in the main producing countries is expected to increase world stocks, mainly because China has a smaller appetite.
Corn production, after an intense loss this year, has the potential to reach 116 million tons next year.
With that, the country gains an export power of 37 million to 38 million tons. Domestic consumption is expected to be 74 million.
In the case of proteins, health problems continue to affect production in some regions. Climatic conditions and production costs are also supply constraints.
China, the main country influencing this market, will have a larger herd of swine in 2022, which may reduce imports. The exchange rate, however, will provide opportunities for Brazilian exports.
In 2022, the Brazilian production of pork rises to 4.6 million tons, and exports, to 1.1 million, according to an assessment by Rabobank.
Bank analysts also estimate an advance of 1% in beef production, which would reach 7.6 million tonnes. Exports would add up to 2 million.
The lack of labor in competing countries and the exchange rate may be factors in the competitiveness of Brazilian beef. Regaining domestic consumption, affected by rising prices, however, will be a challenge, according to analysts.
Poultry production and exports grow 1.5% in 2022. Poultry production will place 14.7 million tons of the protein on the market and will export 4.4 million.
Orange production, contrary to initial expectations, is at just 265 million boxes in the 2021/22 harvest. The global demand for juice, after an improvement in 2020, shows signs of falling again.
Prices, however, remain high, as world juice stocks are low, with the prospect of falling back, in March, to the lowest level in five years.
The supply of milk will be limited, making it difficult for prices to fall in the countryside. Inflation and loss of consumer income, however, should inhibit an expansion of food consumption.
The worsening economic conditions in China have constrained the recovery in pulp prices. The price is also affected by the global expansion of supply.
In 2022, price conditions will still be positive for Brazilian companies, mainly due to the lower cost of domestic production and the help of the dollar.