CNA discusses economic prospects for agriculture in a year of elections and war

The coordinator of the CNA Economic Center, Renato Conchon, presented the economic perspectives for agriculture in a year of elections and war, during an event promoted by the Brazilian Rural Society (SRB), on Friday (08/04).

Conchon showed the panorama of the international economy, highlighting that the bottlenecks have not yet been resolved due to the effects of the Covid-19 pandemic and now the war between Russia and Ukraine. One of the effects of the current scenario is the impact on the price of commodities, which significantly increases production costs.

“Although countries have advanced with vaccination and begun to become more flexible, production costs in Brazil and the world are at historically high levels. Commodity prices in the world are rising and reflecting the increase in costs for Brazilian producers, which could mean an increase in food inflation here and around the world”, he assessed.

Conchon believes that the unfolding of the war and the pandemic should cause some economies to experience higher inflations that will harm their growth, such as India, the United States and the European Union. “These nations should see a significant trend towards higher inflation in the coming years, which will be reflected in policy interest rates around the world.”

The coordinator highlighted, however, that there are still uncertainties about the direction of the economy in the face of new Covid outbreaks in China and other raw material producing countries, in addition to the duration of the war, although a ceasefire is expected in the coming weeks. or months.

“The Gross Value of Production should grow, driven mainly by the rise in commodities. However, if on the one hand revenue is rising, production costs are also rising, and not just for commodity producers”, he warned.

“We are also seeing the cost of products on the domestic market increase, such as beans and rice, for example, but the producer's income does not increase”, he added.

Conchon concluded by saying that both the developments of the war and this year's elections will dictate the direction of the country's economy.