Ipea points to 2,5% growth in the agricultural sector despite Covid-19

The Institute for Applied Economic Research (Ipea) projects growth of 2,5% for the Gross Domestic Product (GDP) of the Brazilian agricultural sector. The result considers the effects of the covid-19 pandemic.

According to the Economic Letter, released today (26) by the agency, growth is based on the harvest forecast announced by the Brazilian Institute of Geography and Statistics (IBGE). According to Ipea, if the National Supply Company (Conab) harvest is considered, growth should be 2,3%.

In the case of livestock, the result takes into account the production volume estimated by the Quarterly Surveys of Animal Slaughter, Milk, Leather and Chicken Egg Production by IBGE and by estimates from the United States Department of Agriculture, considered in the Ipea econometric model.

The institute's survey goes beyond the base scenario and, projecting a possible stress scenario, in which part of production is affected by events related to the coronavirus, reached a result in which performance is positive, but with a lower growth of 1,3 .2020% for XNUMX. According to Ipea, this growth would be supported mainly by farming.

“The crop has a projected increase of 2,8%, supported by soybean and coffee production (6,7% and 1,5%, respectively). Sugarcane is the crop that could suffer the greatest impact due to Covid-19 and the reduction in the international price of oil and, in this context of stress, it could see a 1,9% drop in production”, details Ipea.

Changes in consumption

According to the economist and Ipea researcher, Fábio Servo, it was possible to observe that the social distancing imposed by the pandemic resulted in a change in the population's consumption patterns, resulting in “peaks in demand” that boosted the prices of products such as rice, bananas , coffee and eggs. “We saw a drop in food services and preference for less noble cuts of meat. Even so, crop production supported the positive result of the agricultural sector”, stated the researcher.

Regarding exports, agricultural products registered an increase of 7% between January and April 2020, compared to the same period last year. Comparing the first four months of this year with 2019, the survey shows that beef exports grew "strongly" and reached 26,5%.

According to the document, part of the result is explained by the reopening of meat in natura, in February for the Chinese market. Exports to that country registered a growth of 138% between January and April, compared to the first four months of last year.

Imports

Imports of agro-industrial products registered a drop of 5,5% between January and April 2020, compared to the same period in 2019. Ipea, however, recalls that the value of Brazilian imports of these (agro-industrial) products is “very lower than exports”, and that, therefore, the impact on the agribusiness trade balance is small.

“Wheat and malt – the two highest-value products on the agenda – were responsible for this result, with reductions of 8,2% and 11,3%, respectively, in the imported value”, says the study.