Sugarcane GVP increases by BRL 3 billion

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    Porto Alegre, April 26, 2021 – The most recent data on Brazil’s agricultural Gross Value of Production (GVP) for sugarcane estimated for 2021, with values calculated for March, point to BRL 78.31 billion, which is already 2.51% higher than last year’s BRL 76.40 billion. This level of increase, already significant in the annual comparison of February, contrasts with that of the previous month, when the projections indicated the cane GVP with an annual gain of 0.64% in 2021 compared to 2020. This occurred even in light of the upward adjustment in the GVP of sugarcane in 2020, which rose from BRL 76 to 78 billion.

     Even more intense than the increase in the annual comparison, in the margin the scenario continues to advance even more intensely. Between February and March, the sugarcane GVP increased by 4.06%, equal to BRL 3.05 billion. In the previous month, the advance observed up to then had been BRL 3.75 million in the margin, with gains of 5.25%. It is interesting to note that, at the same time, the total GVP of crops increased 2.73%, or BRL 19.37 billion. Likewise, the total GVP of agribusiness, including the meat industry, advanced by 2.42% in the margin, or BRL 25.00 billion. These advances are in line with the volume of grains produced and favorable prices in foreign markets, given the favorable demand scenarios from China and the United States.

     Sugarcane is briefly cited by the Ministry of Agriculture as a culture within a group with ‘good growth estimates’ along with crops such as cotton, wheat, and orange. Despite this, SAFRAS & Mercado warns that the trend remains within an important inflection point in the short term. This is because if the sugarcane crop losses in the Center-South are confirmed, there may be some negative impact on the GVP of the culture because of the loss of volume, even if the higher prices due to this vector compensate part of the losses of the cane GVP.

     For 2021, the total projected GVP of agribusiness is BRL 1.057 trillion, up 12.42% from the previous year’s GVP of BRL 940.98 billion. In turn, the total GVP of crops is projected at BRL 727.71 billion, indicating an increase of 16.08% YoY. Soybeans are forecast to have a GVP of BRL 345.87 billion, indicating an increase of 31.48% YoY, against BRL 263.13 billion in 2020. Currently, that accounts for 47.54% of the total GVP of crops. The sugarcane GVP for 2021 is currently at BRL 78.31 billion, 10.76% of the total agribusiness GVP. Corn, with a GVP of BRL 129.88 billion, must grow by 20.94% YoY, with 17.85% of the GVP of crops. Coffee, with a GVP of BRL 29.25 billion, must represent 4.02% of the total GVP of crops, as well as a decline of 22.74% YoY.

SAFRAS Latam