The agribusiness Confidence Index (IC-Agro) reached 111.9 points in the first quarter of this year. This is the second best result in the historical series, despite the decline of 3.9 points in relation to the record of the 4th quarter of 2018, which registered 115.8 points. According to the index methodology, calculated by the Federation of Industries of the State of São Paulo (Fiesp) and the Organization of Brazilian Cooperatives (OCB), when the level is above 100 points it is an optimistic environment for the sector.
According to a statement released by Fiesp, the favorable result is synonymous with the confidence of producers, who are optimistic about the general conditions of the Brazilian economy, despite the new government's initial difficulties in carrying out important reforms such as Social Security.
“Infrastructure initiatives through the granting of investments to the private sector, in addition to positions in the environmental area that recognize the advances achieved by the sector, are examples that support the positive perception”, highlights Roberto Betancourt, head director of the agribusiness department from Fiesp.
The confidence index also grew among industries linked to agricultural chains, leading the Industry Confidence Index (Before and After the Porteira) to score 113.6 points in the 1st quarter of the year. Even with the good result, there was a drop of 3.7 points compared to the previous quarter, as a result of a decline in expectations related to the conditions of the Brazilian economy.
The Industry Confidence Index After Porteira remained more stable in relation to the previous quarter. The indicator scored 112.9 points, a drop of just 2 points. Sentiments have cooled a little in relation to the current conditions of the economy – something quite natural, given the strong optimism shown at the end of last year. However, there is a difference in expectations for the coming months, which are more positive, based on the belief in the approval of reforms, such as social security.
“It is also worth remembering that this group includes the participation of slaughterhouses, which are benefiting from the reopening of markets and the prospect of an increase in exports due to the increase in cases of African Swine Fever in China, at a time when the exchange rate is favorable. exports and a second record corn harvest is expected, a factor that also stimulates optimism among logistics companies”, explains Betancourt.
Among agricultural producers, the first quarter of the year ended with more moderate expectations than at the end of 2018, but still quite optimistic. Its Confidence Index was 110.7 points, 4.6 points less than in the previous survey. “One of the aspects that contributed to this decline was the productivity of soybean crops, which did not repeat the records of the previous harvest, mainly in regions affected by the drought at the beginning of the year, such as the West of Paraná and the South of Mato Grosso do Sul ”, points out Freitas. The credit assessment was another item that saw a sharp decline in relation to the previous quarter: “the drop of 19% in the volume of resources released for agricultural pre-funding negatively influenced producers' sentiments. In terms of culture, the reduction in the volume of soybean resources (-35%), canesugar (-13%) and corn (-12%)”, added Freitas.
