WASHINGTON, DC – Brazil has emerged as a major competitor for the United States in global agricultural markets, and is now the world’s third largest exporter behind the European Union (EU) and the United States. Brazil’s macroeconomic policies, currency devaluation, in particular, have played an important role in its position as one of the top exporters of soybeans, corn, cotton, sugar, coffee, orange juice, and meat. Since Brazilian commodities are priced in dollars, depreciation of Brazil’s local currency, the real (BRL), has meant that Brazilian farmers have received more revenue for their crops. The profitabilty in agriculture has encouraged expansion of cropland and adoption of techniques to increase productivity. Simulations show that if the real weakens more than previously expected, exports of major commodities could become even greater, with Brazilian exports increasing for each major commodity except beef and soybean meal.
(SOURCE: All Ag News)