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1 BRAZILIAN AGRIBUSINESS BRAZILIAN AGRIBUSINESSOverview China Development Bank - MDIC Meeting Brasília, January 21 st, 2011.

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Presentation on theme: "1 BRAZILIAN AGRIBUSINESS BRAZILIAN AGRIBUSINESSOverview China Development Bank - MDIC Meeting Brasília, January 21 st, 2011."— Presentation transcript:

1 1 BRAZILIAN AGRIBUSINESS BRAZILIAN AGRIBUSINESSOverview China Development Bank - MDIC Meeting Brasília, January 21 st, 2011

2 Sources: USDA and MAPA 2009 RANKING: BRAZILIAN PRODUCTION AND EXPORTS

3 AGRICULTURAL PRODUCTION INDEX: FAO-OCDE Projections 3 Brazil is the fastest growing agricultural sector by far, growing by over 40% to 2019, when compared to the base period. (OECD-FAO Agricultural Outlook )

4 Source: Ministry of Agriculture, Brazilian Institution of Geography and Statistics (pastures – 2006) AGRICULTURE AREA 2007/2008 HARVEST Most of recent expansion in agricultural area is on pasture land

5 Source: Agriculture and Livestock National Confederation – June 2009 MAJOR AGRICULTURAL PRODUCTS IN BRAZIL GROSS VALUE OF PRODUCTION 5

6 BRAZILIAN AGRIBUSINESS EXPORTS MAIN PRODUCTS – 2010* Source: Ministry of Development, Industry and External Commerce Elaboration: Ministry of Agriculture 6 Total: US$ 73.9 billion * From November 2009 to October 2010

7 BRAZILIAN AGRIBUSINESS EXPORTS MAIN DESTINATIONS – 2010* Source: Ministry of Development, Industry and External Commerce Elaboration: Ministry of Agriculture 7 * From November 2009 to October 2010 Total: US$ 73.9 billion

8 Sources: Ministry of Agriculture, Brazilian Institute of Geography and Statistics DOMESTIC CONSUMPTION AND EXPORTS Roughly 70% of the Brazilian agricultural production aims the national market. Elaboration: Ministry of Agriculture 8

9 Harvesting soybean Harvesting cotton Corn field Soybean field GRAINS 9

10 GRAINS - PRODUCTION AND AREA 1991 to 2010 Source: National Company of Food Supply 10 Harvested Area Growth: 24,9% = 1.2% / year Production Growth: 157,3% = 5,1% / year

11 MEAT Large scale, state of the art production Biggest exporter of beef and poultry

12 ¹ The meat consumption in Brazil is close to 100 kg / inhabitant / year, with more than 43 kg of chicken meat, 37 kg of beef and 14 kg of pork. Domestic demand accounts for about 70% of chicken production, 80% of beef production and 85% of pork production. Source: Conab MEAT PRODUCTION EVOLUTION High domestic consumption and #1 world exporter Broiler: + 170% (95-09) Beef: +70 % (95-09) Pork: + 117% (95-09)

13 SUGARCANE 13

14 SUGAR AND ETHANOL: PRODUCTION AND AREA Estimate SUGAR Growth : 93.2% (8.6% p.y.) ETHANOL Growth : 142.4% (11.7% p.y.) Sources: Ministry of Agriculture, National Company of Food Supply Harvested Area Growth : 44.5% (5.4% p.y.) 14

15 15 Brazilian Coffee One country, many flavors

16 FRUITS: Diversity and Good Quality

17 MILK 17

18 MILK Source: Milk National Forum – Brazilian Confedeeration of Agricultrue and Livestock 18 Increasing production lead to self sufifciency

19 PLANTED FORESTS (Million ha) Hardwood Conifers Source: ABRAF Forestry productivity Planted forests million ha support a diversified wood industry Biggest world exporter of hardwood pulp Highest productivity country in the world Largest growth potential

20 20 FOREIGN INVESTIMENT FOREIGN INVESTIMENT IN AGRIBUSINESS

21 World population growth with increasing per capita income Continuous need of food production increase GLOBAL TRENDS Shortage of new areas for agricultural production Challenges to food security Increasing demand for higher-quality, better, protein-intensive food (i.e.meat)

22 BRAZILIAN AGRIBUSINESS COMPETITIVE ADVANTAGES Strong, thriving economy & Institutional framework Leadership in tropical technology Natural resources abundance (land, water, solar energy) Farming vocation & Business entrepreneurship

23 STRONG, THRIVING ECONOMY & INSTITUTIONAL FRAMEWORK Social inclusion & income distribution (upgrowth of middle class) Investment enhancement Consolidated democracy, with stable legal and institutional framework Infrastructure long-term investment program, with strategic actions Sustainable growth based on macroeconomic prudential policies Robust fiscal rules (primary surplus & rigid control of public deficit) Low external vulnerability (with free capital flow) Land investments in Brazil follow well established regulatory procedures permitting several forms of access to foreign investors

24 EVOLUTION OF FOREIGN DIRECT INVESTMENTS IN BRAZIL

25 FOREIGN DIRECT INVESTMENTS By origin - average

26 STRONG, THRIVING ECONOMY & INSTITUTIONAL FRAMEWORK No restrictions on commodity exports BRAZILIAN TRADE BALANCE (1990 – 2010*) Source: Ministry of Development, Industry and Foreign Trade Elaboration: Ministry of Agriculture *Last 12 months (Nov09 – Oct 10) TOTAL AGRIBUSINESS OTHERS

27 STRONG THRIVING ECONOMY & INDUSTRIAL FRAMEWORK INFRASTRUCTURE LONG-TERM INVESTMENT PROGRAM 27

28 LEADERSHIP IN TROPICAL TECHNOLOGY Continuous & persistent public and private investments on R&D Opened partnerships with other countries Expressive results of productivity Efficient use of natural resources

29 Producer Support Estimate (Public Support to Farmers) Source: Organization for Economic Cooperation and Development Brazils competitiveness doesnt rely on subsidies. 29 FARMING VOCATION & BUSINESS ENTREPRENEURSHIP

30 Harvesting soybean Sowing corn (2 nd harvest) Scale, mechanization Two crops in the same year without irrigation No tillage (environmentally friendly) DOUBLE CROPPING - CORN AFTER SOYBEAN 30 TECHONOLOGY and ENTREPRENEURSHIP

31 Direct Investment on Projects (Transportation, Storage, Harbourage) Production Infrastructure Food Processing DistributionLogistics Machinery and Equipments The agribusiness productive chains offer several possibilities for foreign investors: Capital Markets (Stocks, Investment Funds) Contract Farming (payment in products) Partnerships and Joint Ventures FOREIGN INVESTMENT IN AGRIBUSINESS 31

32 Ministry of Agriculture, Livestock and Food Supply Department for Agribusiness International Promotion Esplanada dos Ministérios, Bloco D, 3º Andar, sala Brasília - DF, BRAZIL Phone: +55 (61) Maurício Fleury Curado Advisor for Foreign Investment 32


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