Coronavirus may affect Brazil’s importation of agri-inputs

The spread of coronavirus represents a problem for the exportation of commodities from Brazil, mainly in terms of products exported to China, which account for 32% of Brazil’s foreign sales in the agribusiness sector.

 

However, concerns about the virus are not only limited to exports but also to imports. Brazil depends heavily on Chinese inputs, and restrictions to people’s mobility, with consequences to the flow of logistics, will affect Brazil’s imports of active ingredients from the Asian country, according to analysts at Itaú BBA.

 

Last year, 38% of Brazil’s imports of crop protection products came from China. With regards to some specific products, the Brazilian dependence on the Asian country has reached 99%, such as glyphosate, an important herbicide to national agriculture.

 

However, the resulting closure of industries and interruptions to commerce were not foreseen, at least until now. In addition, Brazil imports the largest volume of products from May to October.

 

Current levels of business inventories and virus control efforts can avoid a more drastic situation in the supply of these inputs, but an interruption would greatly interfere with market prices.

 

For this reason, banking analysts have warned producers to pay attention to the disease’s development and market opportunities.