Floods in Rio Grande do Sul have an impact on the price of rice, soybeans and milk, according to Epagri

Other chains may also be impacted, such as meat

21.05.2024 | 15:06 (UTC -3)
Marcionize Elis Bavaresco
Photo: Aires Mariga
Photo: Aires Mariga

The market is beginning to reflect the problems caused by the floods in Rio Grande do Sul on some agricultural production chains. The State is the largest rice producer, the second largest soybean producer and the third largest milk producer in the country. In these products, the impact of losses, not yet fully accounted for, influenced the increase in prices paid to producers or wholesale. The information is contained in the Agricultural Bulletin for the month of May. The monthly publication, from the Center for Socioeconomics and Agricultural Planning (Epagri/Cepa), brings together current information on some of the main agricultural products in Santa Catarina.

Other chains may also be impacted, such as meat. The extent of this depends, especially, on the time needed to reestablish production flow conditions in the state of Rio Grande do Sul. Corn, although it recorded losses due to the floods, did not experience significant price fluctuations, mainly because good harvests in other producing regions have kept supply stable. The Agricultural Bulletin can be accessed on the website of the Observatório Agro Catarinense, Epagri and the State Secretariat for Agriculture and Livestock (SAR).

Rice

In Santa Catarina, the prices of paddy rice, which until April maintained a downward trend, expected for the period due to the advance of harvesting and commercialization in the State, appreciated in the first half of May. According to Socioeconomics and Rural Development analyst, Glaucia Padrão, this behavior was influenced by the prolonged flooding in Rio Grande do Sul, which caused the state average for the most common price to once again exceed the mark of R$100,00 per bag. of 50kg, an increase of 3% compared to the average for the month of April.

The analyst explains that, although more than 80% of the rice sown area in Rio Grande do Sul has been harvested, uncertainties regarding the percentage of losses of what is still in the field or even stored in industries should keep the market buoyant.

In Santa Catarina, it is estimated that the 2023/2024 rice harvest will have a decrease of 8,11% in production compared to the previous harvest. The reasons are the reduction in planted area (approximately 0,9%) and weather problems that affected productivity. As a result, the estimated production to date in the State is 1,16 million tons. To date, 99% of the planted area has been harvested and only ratoon areas remain on the North Coast.

With a smaller harvest, rice imports have stood out and should be expanded in the coming months. Between January and April, Santa Catarina imported around US$11,2 million in rice and derivatives, which represents a variation of 160,97% compared to the same period of the previous year.

Soybean

In April, prices paid to producers in Santa Catarina for soybeans returned to their prices at the beginning of the year, after falling in February and March. In April, the average monthly value was R$117,25 per 60kg bag, an increase of 5,8% compared to the previous month. However, compared to March 2023, the drop in prices registered 12,9%. Prices were influenced by expectations of a good harvest in the United States (Chicago Stock Exchange) and the recovery of the Argentine harvest.

According to the Socioeconomics and Rural Development analyst at Epagri/Cepa, Haroldo Tavares Elias, the increase in prices, recorded in April and the beginning of May, was influenced by a series of factors: the increase in domestic demand and soybean negotiations in the Brazilian market, driven by the appreciation of the dollar in relation to the real, which makes Brazilian commodities attractive on the international market; the impact of floods in Rio Grande do Sul on the quality of crops that remained in the field before the floods (around 22%); rumors of a possible strike in Argentina, which is the main exporting country of soybean meal; the increase in external and internal demand for Brazilian soy derivatives (oil and bran).

Milk

The price of milk, paid to producers in Santa Catarina in May, had the sixth consecutive month of growth and, taking into account the movement of the market for 'spot' milk (sold between industries) and UHT (long life), it should follow the upward trajectory. According to the Socioeconomics and Rural Development analyst at Epagri/Cepa, Tabajara Marcondes, one of the factors that indicate the maintenance of increases are the floods in Rio Grande do Sul, a state that accounts for around 13% of the raw milk purchased by the inspected industries in Brazil. and with an important participation in the interstate market for milk and dairy products.

The analyst states that only after overcoming the most critical period and with more precise surveys on the consequences of the floods will it be possible to carry out more qualified projections on national dairy production in 2024. “In any case, it is already a fact that the market has completely changed in compared to the end of April and the first days of May, with a significant increase in the prices of “spot milk” and UHT milk, which should extend to other products”, he says.

The average price most commonly paid to Santa Catarina producers in the main producing regions, in May, was R$2,41, an increase of approximately 3,5% compared to the previous month. The data is collected by Epagri/Cepa.

Corn

The May Agricultural Bulletin confirms the reduction in total corn production in Santa Catarina. The current estimate points to a production of 2,26 million tons, which represents a decrease of 21,8% compared to the previous harvest. The weather conditions at the beginning of the harvest impacted the production potential. Currently, around 92% of the estimated planted area has been harvested. In relation to the market, corn prices decreased by 6,6% between January and March 2024. In the last 30 days the reduction was 0,3%. However, in the first 15 days of May prices reacted in the State, with a growth of 3,7%. The rising consumption of cereals in Brazil (feed and ethanol) and the lower national production in the 2023/24 harvest should affect the balance between supply and demand. On the international scene, a reduction of 10 million tons was reported in the 2024/25 world harvest. In this context, the trend, in the medium term, is for prices to recover in the domestic and foreign markets.

Bean

In the month of April, the prices received by Santa Catarina's carioca bean producers fell by almost 20% compared to the previous month. The average state price went from R$226,10 to R$180,97 per 60 kg bag. As for black beans, the average price paid to producers fell by 35,5% compared to the previous month, going from R$310,00 to R$199,94 per 60kg bag. Until the first half of May, the losses from the gaucho bean harvest were not reflected in the market. This occurred mainly due to the increase in the area of ​​second-crop black beans in Paraná. Santa Catarina's bean harvest (including the first and second harvest) is expected to reach 117 thousand tons, 2,82% more than in the previous harvest.

Wheat

In April, the average prices received by wheat producers in Santa Catarina remained stable in relation to the previous month. In the annual comparison, in nominal terms, the variation is negative. The prices received in April this year are 21,31% lower than those recorded in the same month of 2023. For the next harvest (2024/25), which begins to be planted in the State from the second half of May, the costs production and climate forecasts should influence producers' decisions. For the 2024/25 harvest, the estimated reference cost, raised by Epagri/Cepa, is R$4.898,92 per hectare, a decrease of 4,21% in relation to the reference costs estimated in the previous harvest.

Garlic

In April, Brazil imported 16,35 thousand tons of garlic, an amount 48,36% higher than in the same month last year. The average price (FOB) of imported garlic was US$1,47 per kilo, an increase of 13,95% compared to the average price recorded in March. The main vegetable supplier countries in April were Argentina (with 88,08% of the total imports) and China (which supplied 11,85% of the total). In the same month, the average price paid to Santa Catarina producers was R$13,00 per kilo for garlic classes 2-3 (an increase of 6,47% compared to the previous month), R$18,00 per kilo for garlic classes 4-5 (increase of 20,64%) and R$18,20 per kilo for garlic classes 6-7 (reduction of 12,31% compared to March).

Onion

In Ceagesp/SP, in April, the average price per kilo of national onion was R$6,32 per kilo, an increase of 1,44% compared to the price at the beginning of March, when it was R$6,23 per kilo. The domestic supply of national products remains low, which kept prices high throughout the month. The average price paid to Santa Catarina producers in April was R$4,87 per kilo, an increase of 27,48% compared to the average price in March, which was R$3,82. Imports, in the first four months of 2024, exceed 160 thousand tons, with 50% of the volume being sold in April. The main supplier country was Argentina, with 64,26 thousand tons, equivalent to 76,80% of the total imported; in second place was Chile, which sold 15,70 thousand tons of onions to Brazil, 18,76% of the total.

Banana

The banana market in Santa Catarina, between January and February, showed a devaluation in prices with the national increase in the supply of the fruit due to high temperatures and greater maturation of bunches in banana plantations. In the first four months, Brazilian exports showed a 61,3% reduction in volume, compared to the same period of the previous year. In the same period, Santa Catarina reduced the volume of banana exports by 60,7%, which went from 14,2 thousand tons in 2023 to 5,6 thousand tons in the same period of 2024. The value traded in the period showed a reduction of 61,9 .5,76%: went from US$2,16 million to US$XNUMX million.

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