BRAZILIAN AGRIBUSINESS
Overview
China Development Bank - MDIC Meeting
Brasília, January 21st, 2011
1
2009 RANKING: BRAZILIAN PRODUCTION AND EXPORTS
Production
Exports
Number of
Markets
Exports
US$ Billion
Sugar
1st
1st
124
8.378
Coffee
1st
1st
81
3.762
Orange Juice
1st
1st
75
1.619
Soybeans
2nd
2nd
46
11.413
Beef
2nd
1st
142
4.118
Tobacco
2nd
1st
100
2.992
Ethanol
2nd
1st
48
1.338
Broiler
3rd
1st
146
5.307
Corn
4th
3rd
49
1.259
Pork
4th
4th
81
1.225
Main Products
Sources: USDA and MAPA
AGRICULTURAL PRODUCTION INDEX: 1992-2019
FAO-OCDE Projections
“Brazil is the fastest growing agricultural
sector by far, growing by over 40% to 2019,
when compared to the 2007-09 base period.”
(OECD-FAO Agricultural Outlook 2010-2019)
3
AGRICULTURE AREA
2007/2008 HARVEST
Most of recent expansion
in agricultural area is on
pasture land
Source: Ministry of Agriculture, Brazilian Institution of Geography and Statistics (pastures – 2006)
MAJOR AGRICULTURAL PRODUCTS IN BRAZIL
GROSS VALUE OF PRODUCTION
Source: Agriculture and Livestock National Confederation – June 2009
5
BRAZILIAN AGRIBUSINESS EXPORTS
MAIN PRODUCTS – 2010*
Total: US$ 73.9 billion
Source: Ministry of Development, Industry and External Commerce. 2009
Elaboration: Ministry of Agriculture
* From November 2009 to October 2010
6
BRAZILIAN AGRIBUSINESS EXPORTS
MAIN DESTINATIONS – 2010*
Total: US$ 73.9 billion
Source: Ministry of Development, Industry and External Commerce. 2009
Elaboration: Ministry of Agriculture
* From November 2009 to October 2010
7
DOMESTIC CONSUMPTION AND EXPORTS
Roughly 70% of the Brazilian agricultural production aims the national market.
Sources: Ministry of Agriculture, Brazilian Institute of Geography and Statistics - 2009
Elaboration: Ministry of Agriculture
8
Corn field
Harvesting soybean
GRAINS
Harvesting cotton
Soybean field
9
GRAINS - PRODUCTION AND AREA
1991 to 2010
149,0
143,7
122,5
Million tons and hectares
123,2
135,2
131,7
100,3
114,7
Production
81,1
78,4
68,3
Growth: 157,3% = 5,1% / year
82,4
57,9
37,9
91
92
35,6
93
94
38,5
95
36,6
96
97
Source: National Company of Food Supply
98
43,9
37,8
36,9
49,1
47,7 47,3
46,2
Harvested Area
Growth: 24,9% = 1.2% / year
99
00
01
02
03
04
05
06
07
08
09
10
10
MEAT
Large scale, state of the art production
Biggest exporter of beef and poultry
MEAT PRODUCTION EVOLUTION
12.000
10.932
12000
11.000
Broiler:+ +170%
216%(95-09)
(94-09)
Broiler:
Thousand metric tons
10.00010000
Beef
9.000
Broiler
8000
9.180
8.000
Beef:
% (95-09)
Beef:
+83+70
% (94-09)
3.190
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
2.000
0
1,330
1997
3.000
Pork: + 117% (95-09)
1996
4.000
3,411
2000
1995
5.000
2009
5,200
6.000
4000
1994
Thousand Metric Tons
7.000 6000
1.000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: Conab
High domestic consumption and #1 world exporter
¹ The meat consumption in Brazil is close to 100 kg / inhabitant / year, with more than 43 kg of chicken meat, 37 kg of beef and 14 kg of
pork. Domestic demand accounts for about 70% of chicken production, 80% of beef production and 85% of pork production.
SUGARCANE
13
SUGAR AND ETHANOL: PRODUCTION AND AREA
20
35
31,3
SUGAR
30
27,6
Production
25
20
15
16
14
12
ETHANOL
Growth 2002-2009: 142.4% (11.7% p.y.)
8,9
11,5
10
8
10
6
7,4
4,3
4
5
Harvested Area
Growth 2002-2009: 44.5% (5.4% p.y.)
Harvested area (millions ha)
Growth 2002-2009: 93.2% (8.6% p.y.)
18
2
0
0
Harvested area
Sugar (million tons)
Ethanol (million m³)
14
Sources: Ministry of Agriculture, National Company of Food Supply
Brazilian Coffee
One country, many flavors
15
FRUITS:
Diversity and
Good Quality
MILK
17
MILK
Increasing production lead to self sufifciency
Source: Milk National Forum – Brazilian Confedeeration of Agricultrue and Livestock
18
PLANTED FORESTS
Planted forests - 6.8 million ha support a diversified wood industry
 Biggest world exporter of hardwood pulp
 Highest productivity country in the world
 Largest growth potential

Forestry productivity
Conifers
40,5
15
5,5
Source: ABRAF
18
12
m³/ha/year
45
40
35
30
25
20
15
10
5
0
(Million ha)
m³/ha/year
Hardwood
40
35
30
25
20
15
10
5
0
37,6
22
10
3,5
2,5
FOREIGN INVESTIMENT
IN AGRIBUSINESS
20
GLOBAL TRENDS
World population growth with increasing per capita income
Increasing demand for higher-quality,
better, protein-intensive food (i.e.meat)
Continuous need of food production increase
Shortage of new areas for agricultural production
Challenges to food security
BRAZILIAN AGRIBUSINESS
COMPETITIVE ADVANTAGES

Strong, thriving economy & Institutional framework

Leadership in tropical technology

Natural resources abundance (land, water, solar energy)

Farming vocation & Business entrepreneurship
STRONG, THRIVING ECONOMY
&
INSTITUTIONAL FRAMEWORK

Social inclusion & income distribution (upgrowth of middle class)
Investment enhancement

Consolidated democracy, with stable legal and institutional framework

Infrastructure long-term investment program, with strategic actions

Sustainable growth based on macroeconomic prudential policies

Robust fiscal rules (primary surplus & rigid control of public deficit)

Low external vulnerability (with free capital flow)

Land investments in Brazil follow well established regulatory procedures
permitting several forms of access to foreign investors
EVOLUTION OF FOREIGN DIRECT INVESTMENTS IN BRAZIL
2001-2009
43,886
45,000
40,000
33,705
US$ million
35,000
30,444
30,000
25,000
21,042
20,265
18,778
20,000
15,000
21,522
22,231
12,902
10,000
5,000
0
2001
2002
2003
2004
2005
2006
2007
2008
24
2009
FOREIGN DIRECT INVESTMENTS
By origin - average 2007-2009
Others
25.4%
Netherland
s
17.1%
Canada
3.4%
Cayman
Islands
3.9%
Germany
4.9%
France
Japan 5.7%
5.8%
USA
16.5%
Spain
8.7%
Luxembur
g
8.6%
25
STRONG, THRIVING ECONOMY & INSTITUTIONAL FRAMEWORK
No restrictions on commodity exports
BRAZILIAN TRADE BALANCE (1990 – 2010*)
70
61.2
60
AGRIBUSINESS
50
17.4
40
b il l i o n
30
TOTAL
20
10
0
-10
US $
-43.8
-20
OTHERS
-30
-40
-50
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10*
Source: Ministry of Development, Industry and Foreign Trade
Elaboration: Ministry of Agriculture
*Last 12 months (Nov09 – Oct 10)
INFRASTRUCTURE LONG-TERM INVESTMENT PROGRAM
STRONG THRIVING ECONOMY & INDUSTRIAL FRAMEWORK
27
LEADERSHIP IN TROPICAL TECHNOLOGY

Continuous & persistent public and private
investments on R&D

Opened partnerships with other countries

Expressive results of productivity

Efficient use of natural resources
FARMING VOCATION & BUSINESS ENTREPRENEURSHIP
Producer Support Estimate (Public Support to Farmers)
50%
Brazil’s competitiveness
doesn’t rely on subsidies.
30%
26%
5%
6%
12%
14%
Russia
14%
USA
21%
9%
Japan
E.U.
OECD
Canada
Mexico
China
Brazil
Autralia
New
Zeland
1%
29
Source: Organization for Economic Cooperation and Development
TECHONOLOGY and ENTREPRENEURSHIP
Sowing corn
(2nd harvest)
No tillage
(environmentally friendly)
Harvesting
soybean
DOUBLE CROPPING - CORN AFTER SOYBEAN
Scale, mechanization
Two crops in the same year without irrigation
30
FOREIGN INVESTMENT IN AGRIBUSINESS
Production
Food
Processing
Distribution
Machinery and
Equipments
Infrastructure
Logistics
The agribusiness productive chains offer several
possibilities for foreign investors:
 Direct Investment on Projects (Transportation, Storage, Harbourage)
 Contract Farming (payment in products)
 Capital Markets (Stocks, Investment Funds)
 Partnerships and Joint Ventures
31
Ministry of Agriculture, Livestock and Food Supply
Department for Agribusiness International Promotion
Maurício Fleury Curado
Advisor for Foreign Investment
Esplanada dos Ministérios, Bloco D, 3º Andar, sala 338
70043-900 - Brasília - DF, BRAZIL
Phone: +55 (61) 3218-2425
E-mail: [email protected]
www.agricultura.gov.br
32