In 2023, the international landscape presented numerous challenges and opportunities that significantly influenced global trade dynamics. Geopolitical tensions, particularly the ongoing conflict in Ukraine, played a relevant role in reshaping trade routes and commodity markets. Disruptions in the Black Sea region, traditionally a critical hub for grain exports, led to substantial shifts in global supply chains. This situation opened avenues for other major agricultural producers, such as Brazil, to strategically fill the gaps left by the constrained supply from Ukraine and Russia, thereby reinforcing Brazil’s position in global trade.

Additionally, the global economy’s recovery from the COVID-19 pandemic and the subsequent reopening of the Chinese market further influenced international trade patterns. China’s resumption of economic activities spurred patterns. China’s resumption of economic activities spurred a substantial increase in demand for various commodities, reinforcing its position as a key player in global trade. These geopolitical and economic factors created a unique environment for commodity-exporting countries like Brazil.

As one of the world’s leading exporters of agricultural products, Brazil was well-positioned to leverage these international developments. The country capitalized on the increased demand from China and other global markets, enhancing its export performance in 2023. Brazilian agribusiness, including a diverse range of commodities such as soybeans, corn, and beef, experienced significant growth, driven by increased production and favorable international prices.

The Brazilian agribusiness sector concluded 2023 with a significant trade surplus, underscoring its pivotal role in the nation’s economic performance. The sector demonstrated its resilience and adaptability in a volatile international market, achieving an accumulated surplus of USD 148.58 billion, a 4.9% increase compared to the previous year. This growth is a testament to the sector’s ability to navigate challenging global trade dynamics.

The agribusiness sector recorded a total of USD 165.05 billion in exports, marking a 3.9% increase over the 2022 figures. Conversely, imports for the industry amounted to USD 16.47 billion, representing a 4.5% decline from the previous year. These figures indicate a robust agricultural sector performance, which not only maintained but slightly increased its share in Brazil’s total exports. The agribusiness sector’s participation in total exports rose by 1.04 percentage points, reaching 48.6% in 2023, up from 47.6% in 2022.

The soybean complex remained dominant in Brazilian agricultural exports, achieving a total export value of USD 67.31 billion in 2023, a 10.7% increase from the previous year. Soybeans in grain form alone contributed USD 53.23 billion, supported by a 14.4% increase in value and a substantial 29.4% rise in the volume exported. The surge in demand for Brazilian soybeans was driven by a reduction in supply from key competitors such as the United States and Argentina, as well as an increased demand from China.

Corn exports also demonstrated strong performance, with an 11.6% increase in value to USD 13.48 billion. The volume of corn exported surged by 29.4%, reaching 55.86 million tons. This increase was fueled by favorable production conditions for Brazil’s second crop of corn and robust demand from the Chinese market.

Sugar exports saw remarkable growth, with the total export value reaching USD 15.77 billion, a 42.9% increase compared to 2022. The volume of sugar exports rose by 15.1%, amounting to 31.42 million tons. The rise in sugar exports can be attributed to higher international prices driven by a decline in global supply.

Despite these positive trends, some agricultural products experienced declines in export value. For instance, cotton exports fell by 16.4% to USD 3.08 billion due to reduced international demand and increased competition from the United States and China. Similarly, coffee exports decreased by 12.5% to USD 8.09 billion, impacted by logistical challenges and a decline in the average export price.

The export performance of Brazilian animal proteins in 2023 underlines the sector’s resilience and growing international competitiveness. Brazil’s protein exports, which include beef, chicken, and pork, showcased varied trends across different products, reflecting both opportunities and challenges in the global market.

In 2023, Brazilian beef exports faced a mixed performance. The total volume of beef exported reached 2.29 million tons, representing a modest increase of 1.2% compared to the previous year. However, the value of beef exports saw a significant decline of 18.7%, falling to USD 10.54 billion. This decline was primarily due to a 19.6% drop in the average export price of beef, which was influenced by factors such as increased global competition and fluctuating demand. Despite these challenges, the resumption of beef exports to China in the latter half of the year provided some relief, aiding in the partial recovery of the sector.

The chicken export sector also experienced a downturn in 2023. The volume of chicken exported decreased by 7.9% to 4.29 million tons, and the export value fell by 12.9%, totaling USD 8.29 billion. The average export price of chicken dropped by 5.5%, reflecting a combination of increased supply from other major producers and shifting consumption patterns in key markets. Nonetheless, Brazil remained a crucial supplier in the global poultry market, benefiting from its reputation for high-quality and competitively priced products.

In contrast to beef and chicken, pork exports from Brazil demonstrated robust growth in 2023. The volume of pork exported rose 9.2% to 1.20 million tons, while the export value increased by 9.6%, reaching USD 2.79 billion. The consistent demand for Brazilian pork, particularly from Asian markets such as China, drove this positive trend. The stringent biosafety standards adopted by Brazil’s pork production chain enhanced its appeal in the international market, solidifying its position as a reliable and competitive supplier.

Commercial balance

As agricultural goods, in 2023, petroleum and its derivatives emerged as critical components of Brazil’s export portfolio, reflecting the sector’s substantial contribution to its trade balance. The exports of crude petroleum oils and oils obtained from bituminous minerals totaled USD 44.2 billion, representing approximately 13% of Brazil’s total annual export earnings. This significant figure punctuates the strategic importance of the petroleum sector, not only as a major source of export revenue but also as a vital contributor to the country economic resilience. The performance of petroleum exports was buoyed by robust international demand and favorable pricing conditions, which, combined with advancements in extraction and production technologies, reinforced Brazil’s position as a leading exporter in the global energy market.

Indisputably, the robust performance of the agribusiness sector was relevant to achieving a record trade surplus in 2023. The sector’s share of total Brazilian exports rose to 48.6%, highlighting its critical contribution to the national economy. By efficiently responding to international demand and overcoming supply chain challenges, Brazilian agribusiness has reinforced its essential role in both the national economy and the global food supply chain.

Brazilian exports are poised to maintain their strong performance in 2024. Ongoing geopolitical tensions, particularly in regions like the Black Sea and the Middle East, are expected to sustain high demand for Brazilian commodities. The agribusiness sector, especially soybeans, corn, and sugar, is likely to benefit from these dynamics. Additionally, Brazil’s stringent biosafety standards in pork production and advancements in agricultural technology will further enhance the sector’s competitiveness.

Authored by Cristiano Oliveira, Head of Research at Rivool Finance.