Agriculture pulls Brazil out of the doldrums

Brazil's Gross Domestic Product (GDP) grew by 2017 percent in the first quarter of 1. Since the second quarter of 2015, GDP in the Latin American country has stopped growing. The positive need is entirely attributable to the agricultural sector.

Since 2015, the country, which has the largest economy in South America, has been in recession. The start of 2017 will change that, with growth of 1 percent compared to the previous quarter. At that time the percentage was still -0,9. The reason for this is a soy crop that is 13,4 percent larger than last year. According to figures from the Brazilian government, reports the Financial Times.

First increase in 8 quarters
Agriculture may call itself responsible for the first increase in 8 quarters, compared to Q1 2016 GDP is still 0,4 percent lower. The growth is unexpected for the Brazilian government. President Michel Temer, who has been under fire over a corruption scandal, is using the news to find renewed support for his government.

Short-lived revival
According to analysts, the news only means that the absolute bottom is behind us. Despite this, Brazil's import and export levels fell by 21 percent in the first quarter of 2017. Less positive news is expected in the second quarter. Despite what President Temer reports, experts do not expect the economy to actually improve. Certainly not because of the measures taken by his government. The budget deficit currently stands at 9,2% of GDP.

Area shrinking
The USDA Department of Agriculture expects Brazil to harvest about 95 million tons of soybeans this season. A slight decrease in the acreage is expected for the 2017-2018 season, for which preparations are now underway. This is reported by the organization for soy and maize growers in the province of Mato Grosso (Aprosoja-MT).

More GMO-free soy
The organization also reports that the share of non-GMO soy is increasing in the province. From 10 to 15 percent. This is due to the demand for GMO-free soy in Europe. Per bag of 60 kilos, 7 to 18 real more is paid for these soybeans, converted to 33 to 94 euros per ton.

Niels van der Boom

Niels van der Boom is a senior market specialist for arable crops at DCA Market Intelligence. He mainly makes analyses and market updates about the potato market. In columns he shares his sharp view on the arable sector and technology.

n.vanderboom@boerenbusiness. Nl

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