Credit, Costs Pressure Brazil's Agribusiness

(MENAFN- Brazil-Arab News Agency (ANBA)) São Paulo – The cost of obtaining credit has been the main challenge for Brazilian agribusiness this year. The issue was the central topic in the Tuesday morning (2) panels at the 12^th Brazilian Fertilizer Congress, held in São Paulo by the National Association for Fertilizer Diffusion (ANDA).

In the panel“Brazilian Economy, Agribusiness, and Fertilizers,” MB Associados' chief economist, Sergio Vale, presented the current outlook and prospects for the global and Brazilian economies. The United States, he said, is likely to face high inflation and a decline in industrial output in the coming years, which could lead President Donald Trump to adopt new tariff hikes, including on Brazil. Domestically, high interest rates and rising defaults are putting pressure on farmers.

The Secretary of Agricultural Policy at Brazil's Ministry of Agriculture and Livestock, Guilherme Campos Jr., said that a large number of companies undergoing bankrupty in Brazil's center-west had an impact on that region's agribusiness last year and led banks to adopt stricter criteria for granting credit. He mentioned government efforts to support producers but acknowledged,“This year's Harvest Plan [to encourage the granting of rural credit] was the largest in history, but with the benchmark Selic rate at 15%, farmers are being very cautious about taking on loans and focusing more on working capital,” he said.

Fertilizer Analyst at Agrinvest Commodities, Jeferson Souza, pointed out challenges in corn and soybean crops, which directly affect fertilizer purchases, and noted that Brazil's southernmost state of Rio Grande do Sul, a major agribusiness producer, is facing difficulties in its fields.

Agribusiness with a focus on sustainability

Sustainability was another key topic at the meeting. Francisco Matturro, CEO of the Integrated Crop-Livestock-Forestry (ILPF) Network, presented the system for regenerating degraded areas promoted by the institution, a public-private partnership. In one of the examples shared, a farm in Brazil's Center-Western state of Goiás increased its production of soybeans, corn, and beef, as well as the organic matter available on the property.

Jenny Wang, Commercial Executive Vice President at Mosaic, a leading company in the production of certain types of fertilizers, said the company has been investing in new technologies, such as biofertilizers made from organic matter and less harmful to the environment. She also praised Brazil's approach to agribusiness policies.“Brazil is taking a step forward in regulating the [fertilizer] sector and making it easier to register products that bring benefits to crops. And farmers have been more open,” she said, while stressing that the country still needs to be faster and clearer on regulatory matters.

José Carlos Polidoro, advisor at Brazil's agriculture ministry, highlighted the importance of the Caminho Verde program, which focuses on regenerating degraded areas and pastures and converting them into productive land. The ministry estimates that 80 million hectares [198 million acres] are to be recovered. If this occurs within the nine-year period set by the Caminho Verde program, it could raise fertilizer consumption estimates from the current 62.7 million metric tons in 2035 to 71.3 million tons in 2035.

Agribusiness advisor for November's COP30 climate talks and former Agriculture Minister, Roberto Rodrigues, said he will present at the conference in Belém, Brazil's Pará state, a study on issues that need to be addressed to promote sustainability. Among them, he mentioned pasture recovery, enforcement of environmental laws, and showcasing Brazil as a guarantor of global food security.

Brazil's Vice President and Trade Minister Geraldo Alckmin sent a video for the opening of the event. In his presentation, Alckmin showcased projects that, once realized, could produce 15% of the phosphate fertilizers and 20% of the nitrogen fertilizers consumed in Brazil, reducing the country's dependence on imported fertilizers, which, according to government data presented, currently account for 85% of the fertilizers used in Brazilian agriculture.

Read more:
Fertilizer consumption increases in Brazil

Translated by Guilherme Miranda

Supplied/ANDA

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