Porto Alegre, September 5th, 2023 – The most recent data from the Ministry of Agriculture (MAPA) on the Gross Agricultural Production Value (GPV) showed new declines at the margin in the GPV of cane as well as general declines observed both in the total GPV of crops and in the general GPV of agriculture. The increase in production quantities of the grain complex ends up putting pressure on external and internal prices, which justifies the short-term downward adjustments in gross production values. Cane, on the other hand, is in line with the generalized negative adjustments observed in the GVP of agribusiness as a whole, when observed at the margin, compared to the estimates of the previous month. Both sugar and anhydrous and hydrated ethanol had a month of July with downward adjustments in their price references, resulting in an 0.66% decline in the GPV of cane, with a decrease of BRL 696 mln, reducing the GPV from BRL 105.55 to 104.85 bln between June and July.
Despite the negative vector in the short-term perspective (at the margin) this year, we still have positive vectors, with the cane GPV rising by 11.59% from current values (BRL 104.85 bln) to the level of BRL 93.95 bln for 2022, already with the inflationary adjustment on last year’s prices. The GPV of crops is also higher this year, 3.98%, and the general GPV of agriculture is up 1.85% this year when we compare the current level of BRL 1.135 trillion against the range of BRL 1.114 trillion from the previous year, also corrected by inflation.
Once again, we have the maintenance of the pattern of positive collaboration between quantities and prices forecast for August, given that prices in New York for raw sugar and in the physical market for hydrated ethanol are higher in August, amid estimates still between 385 and 600 mln tons of cane forecast for this 2023/24 season. The July data still do not show the upward adjustments for hydrated prices in the physical market in August, but the positive vector is still present for cane GPV over this period. In the textual part, the MAPA indicates that cane is still present as one of the five largest crops in the agribusiness GPV, which account for 81.6% of the total GPV. Cane accounts for 9.23% of the total GPV of agriculture as a whole, and this share should increase by the end of the year, with the final cane value reaching BRL 110 billion, according to SAFRAS & Mercado expectations.
Copyright 2023 – Grupo CMA