Brazil Agroindustry Growing at Fast Pace of 4.6%

In the first half of this year, the Brazilian agroindustry grew by 4.6%, compared with the same period of last year. In the first six months of 2006, the growth rate had been of 1.1% in comparison with the first half of 2005. In the accumulated result for 2006, the result stood at 1.5%. The data were obtained from a survey conducted by the Brazilian Institute for Geography and Statistics (IBGE).

According to the IBGE, the expansion of sectors linked to cattle raising, which grew by 4.9%, surpassed that of those linked to agriculture, which rose by 4.2%.

The group of insecticides, herbicides, and other agriculture-related products grew by 9.9%, mainly due to "their greater use in soy, corn, and sugarcane crops." The wood segment decreased by 1.3%, "probably a reflection of the decrease in export volume."

"In the years of 2005 and 2006, Brazilian agriculture went through a series of difficulties, such as crop loss, especially in the southern region of the country, which is an important producer of grains. Besides, the agroindustry was also harmed by the decrease in international price for some commodities, such as soy, and cattle-raising faced problems due to clusters of aphthous fever in the states of Mato Grosso do Sul and Paraná," said Fernando Abritta, of the Agricultural Research administration at IBGE.

The economist highlighted that forecasts for the sector remain positive. For 2007, the IBGE estimates a record-breaking crop of 133.4 million tons of grains, a result 14% higher than recorded in 2006, and 7.3% greater than the record high crop of 2003.

Despite the dollar depreciation, according to the institute, exports made a positive contribution to the agroindustry, due to the increase in international prices.

ABr