Agriculture & Food

The latest crop production report released in June by the National Commodities Supply Corporation, a subsidiary of the Brazilian Ministry of Agriculture, pointed out that so far, Brazil's soybean and rice production this year has fallen by 10.1% and 9.9%, respectively.

In Brazil, a big agricultural country, some farmers have to reduce the use of chemical fertilizers. The latest crop production report released in June by the National Commodities Supply Corporation, a subsidiary of the Brazilian Ministry of Agriculture, pointed out that so far, Brazil's soybean and rice production this year has fallen by 10.1% and 9.9%, respectively.

The Brazilian Ministry of Agriculture has repeatedly emphasized that the current fertilizer inventory can meet the short-term demand, but the market is generally worried about the subsequent import blockage, and believes that more negative effects will appear in the next few months.

Brazil is one of the world's major soybean producers. About 85% of the country's fertilizers are imported, of which about one-fifth comes from Russia. The Russian Ministry of Industry and Trade previously proposed a complete suspension of fertilizer exports, which directly led to a surge in global fertilizer prices. The price of Brazil's main fertilizer has also risen more than 350 percent from an average of $350 a ton last year to $1,300 a ton this year. Some Brazilian farmers were forced to reduce their use of fertilizers, which directly led to a drop in crop yields.

In addition, Brazil is also the world's largest coffee producer and exporter, and the Brazilian coffee planting industry has also been hit hard.

Head Office reporter Xu Danna: This coffee manor purchases fertilizers for the next year in July each year, but this year, affected by external factors, they started to purchase fertilizers 4 months in advance, that is, in March this year, but Due to the tight supply, the fertilizer they bought could only meet the 6-month supply.

In addition to the lack of fertilizers, the rise in international oil prices caused by the escalation of the Russian-Ukrainian conflict has also led to a surge in international logistics prices, and the price of container transportation has increased by 3 to 5 times, which also affects the prices of Brazilian agricultural products.

Brazilian farmer Wilson Garcia: In general, the rising production costs, the (rising) shipping price, and the appreciation of the US dollar are all worrying.

Felipe Serrigati, a scholar of agricultural economics research from a Brazilian think tank: In fact, the 2022-2023 annual agricultural conference, which will start in September and October this year, has great uncertainty, and the prices of many kinds of food have risen to high points.