Digital agriculture is already a reality in the HF sector and those who use it have a competitive advantage

Cepea, 08.09.2022. – Cepea (Center for Advanced Studies in Applied Economics), from Esalq/USP, today makes available the agro-monthly for August 2022.

Check it out here!

Below are some excerpts from the monthly analyses:

SUGAR: Crystal sugar prices fell in August. The move was attributed to a concentration of negotiations involving the Icumsa 180-type crystal, which was more on offer in this 2022/23 harvest. at lower prices. The availability of crystals of the Icumsa 150 type remained limited, and the prices remained unchanged, because the mills had already contracted to sell a good part of the production of this type of sugar, both for the domestic and foreign markets. Another factor driving down prices in the month was a drop in demand as buyers said they had enough inventory to continue production. In addition, the production mix of sugar at the São Paulo factories is expected to increase, given that the reduction in the tax rate on gasoline reduces the competitiveness of ethanol prices. The CEPEA/ESALQ crystal sugar indicator (State of São Paulo) fell 4.86% in August, closing at R$125.07/50kg bag on the 31st. The monthly average was R$128.87/50kg bag, close to recorded in July (R$128.86/50 kg bag) and 0.35% above the August/2021 average. (R$128.43/50 kg bag), nominal.

COTTON: After accumulating declines for two consecutive months, cotton fiber prices in Brazil rose again in August, returning to levels seen at the end of June. This recovery was related to the strong position of the sellers, who were attentive to the strong appreciation of the contract on the New York Stock Exchange (ICE Futures) and, in part, the export parity. Weak supply on the Brazilian market, especially of higher quality fiber, also reinforced the upward movement of prices. It is interesting that the processing in Brazil has not even reached half, and the agents are focused on fulfilling the contract for a certain period. Between July 29 and August 31, the CEPEA/ESALQ indicator, with payment within 8 days, rose 12.08%, closing at 6.7107 R$/lp on 31. In August, the price in Brazil averaged 12 .6% higher than export parity. The average of the indicator in the month, of R$6.3239/lp, is 4.59% above that of July 22/22. and 10.09% higher than that of 21 Aug/21, in real terms (values ​​deflated by IGP-DI of Jul/22).

RICE: During August/22, paddy rice prices showed a downward trend in Rio Grande do Sul. However, the increase recorded in the first decade of the month ensured the growth of the average compared to July. Lower domestic availability and resistance to sales contributed to maintaining prices. The monthly average of the CEPEA/IRGA-RS indicator for August/22, of BRL 76.47/50 kg bag, was 0.15% higher than that for July/22, which is also the highest since August 2021, when amounted to R$ 77.18/ sc.

OX: The monthly average values ​​of beef (imported carcasses), traded in the wholesale market of the greater São Paulo, went through the first eight months of 2022 in a downward trend. The supply of animals for slaughter remained low for most of this year, while exports recorded a record performance. Thus, the meat devaluation scenario is related to the low consumption of beef proteins on the Brazilian market, due to the weakened purchasing power of the national population, especially as a result of high inflation. Cumulatively for this year (between December 21 and August 22), the married beef carcass recorded a devaluation of 9.5%, in real terms (values ​​are deflated according to IGP-DI). Taking into account the Cepe data series, the August average was R$19.94/kg, 3.4% lower than July/22, 9% lower than August/21 and also the lowest actual average since October 2019, when it was 17.95 R$/kg. Likewise, the average carcass value has also not been below 20 reais/kg since October 2019. As for live cattle, the average for August was R$313.39, down 2.86% compared to July/July. 22 and 8.5% compared to August/21.

COFFEE: Despite the strong oscillations, domestic Arabica coffee prices ended August at a high level. The CEPEA/ESALQ indicator for Type 6 Arabica, published in the city of São Paulo, closed at R$1,344.20/60 kg bag on the 31st, up 43.31 reais/sc (or 3.3%) from the 29 July (last working day of the month). Even with an advance in the month, the indicator varied by almost 100 reais/bag in August. The lowest closing value was the 5th, at R$1261.57/sc, and the highest, the 26th, at R$1351.64/sc. At the beginning of the month, prices were under pressure before the harvest in Brazil and the fear of a new global recession. However, concerns about a lack of rain after the early flowering of the 2023/24 crop. significantly increased values ​​in the second half of the year. Some colleagues consulted by Cepea even warned of the danger of abortion of the first flowers in some regions, if constant rains are not checked.

ETHANOL: Hydrated and anhydrous ethanol prices continued to fall significantly on the São Paulo market in August. In addition to this period being considered the peak harvest in the Central South region, the exact action of buyers has put pressure on biofuel values. Therefore, the average of the CEPEA/ESALQ water price indicator in the full weeks of August was R$2.5970/liter, which is a decrease of 11.3% compared to the previous month. In the same comparison, the CEPEA/ESALQ average anhydrous indicator (considering only the spot market) was R$3.1442/liter, 9.4% lower than in July.

CHICKEN: Higher supply of chicken meat on the domestic market and lower protein liquidity pressured the value of this meat in August in almost all regions monitored by Cepea. In Greater São Paulo wholesale, the value of whole chicken – both chilled and frozen – averaged R$7.70/kg last month, down 0.4% and 0.8%, respectively, compared to the July average.

CORN: Corn prices fluctuated slightly in August, but ended the month with gains on the spot market in most regions tracked by Cepea. Domestic prices were supported by the appreciation of grain in the ports, reflecting the international trend, and by the intense rhythm of exports in August. However, the increases were eventually limited by the higher supply of the second harvest. On the external front, values ​​were boosted by news indicating possible reductions in crop productivity in the United States, drought concerns in Europe and China, and reduced shipments through the Black Sea. Aware of this scenario, many Brazilian sellers have also turned to port negotiations. As for customers, consumers were still holding on to inventory in August and reported occasional difficulties in purchasing new products. Thus, in the accumulated result for August, the ESALQ/BM&FBovespa indicator rose by 1.2%, closing at R$83.94/60 kg bag on 31. The monthly average of R$82.52/sc increased by 0.7 % compared to July. On average, the regions tracked by Cepea accumulated high values ​​of 2.3% on the lot market (available) and 2.5% on the free market (for the manufacturer) in the accumulated month. Comparing the monthly averages, the ratings were 0.9% and 1.6%, respectively.

SHEEP: Live lamb and sheep carcass prices rose in most regions covered by Cepea in August. The incentive was the improvement of domestic demand and the lower supply of animals on the market. Even in states where prices have remained stable, such as Rio Grande do Sul and Mato Grosso do Sul, employees consulted by Cepea also reported improved sales. The sector has good expectations for the coming months, as demand for mutton tends to increase to meet the typical end-of-year holiday consumption. In Mato Grosso, the average price of live animals was R$10.75/kg in August, which is a significant increase of 19.44% compared to the previous month. In Paraná and São Paulo, prices increased by 2.47% and 2.32%, respectively, with an average sheep price of R$13.25/kg in the Paraná market and R$12.33/kg in Paulista. In Mato Grosso do Sul and Rio Grande do Sul, the value of lamb remained stable, at R$11.50/kg and R$10.00/kg, respectively.

SOY: Lower external demand and the caution of domestic buyers, especially in the first half of August, put pressure on the prices of the soybean complex in Brazil. A sharp devaluation of the exchange rate (US$/R$) drove importers out of the country, underscoring the downward trend. The dollar fell by 4.1% between July and August averages, to R$5.15 last month. In August, Brazil exported the smallest amount of soybeans since January of this year. According to Secex, 6.09 million tons of soybeans left Brazilian ports, which is 18.83% less than the amount shipped in July and 6.03% less than the amount shipped in Aug/21. The ESALQ/BM&FBovespa – Paranaguá (PR) and CEPEA/ESALQ – Paraná indicators for oilseeds recorded declines of 1.9% and 1.5% between July and August averages, with respective closes of BRL 187.18/sc and 181, 86 R$/sc of 60 kg. In the average of the regions monitored by Cepea, the declines amounted to 1.9% in the over-the-counter market (paid to the producer) and 1.3% in the lot market (negotiations between companies).

WHEAT: Sowing of this year’s wheat crop ended in August, and estimates point to the possibility of record production in Brazil. This scenario has put pressure on domestic wheat prices. Conab readjusted area and productivity estimates and, consequently, production for this year’s crop in Brazil (2022/23 season, which started in August). The new forecast is that 9.16 million tons will be harvested, which is 19.3% more than the previous season (2021/22). This is the result of an 8 percent increase in the area under crops, a total of 2.96 million hectares, and a 10.5 percent increase in productivity compared to 2021/2022, which reached 3,096 tons/ha.

PRESS OFFICE: Other information: [email protected] and (19) 3429 8836.

Source: CEPEA

Leave a Reply

Your email address will not be published. Required fields are marked *