The GDP of the production chain of soy and biodiesel in Brazil is expected to fall by 5.77% in 2024, totaling R$521.3 billion. This reduction comes after a rise of 22% in 2023 and is mainly associated with the failure of the soybean harvest and its negative effects on agribusiness services. The data comes from a survey carried out by Cepea (Center for Advanced Studies in Applied Economics) at Esalq/USP, in partnership with the Brazilian Association of Vegetable Oil Industries (Abiove), based on information collected up to the second quarter of this year.
Industrial performance in the spotlight
The figures also indicate that the positive performance expected for the industry, especially for the biodiesel segment, could therefore minimize the drop in GDP of the production chain. As a result, the biodiesel industry is expected to grow by 26.92%, thus bringing partial relief to the sector.
Impact on national agribusiness and the Brazilian economy
Although it shows a reduction, the GDP of the soybean and biodiesel chain in 2024 is still expected to remain above pre-pandemic levels, representing 20.8% of the GDP of national agribusiness and 4.5% of the Brazilian economy as a whole.
Pressure on prices and real income
Prices remained unfavorable compared to 2023, but improved in the second quarter. Relative prices are expected to fall by 17.1%, resulting in a 21.88% reduction in real income.
Job market
According to the estimate for the second quarter of 2024, the number of people employed (PO) in the soybean and biodiesel chain maintained a downward trend compared to 2023, totaling 2.24 million workers — a reduction of 4% compared to the second quarter of the previous year.
This decrease impacted the shares of the production chain in the agribusiness PO (9.51%) and in the Brazilian economy (2.23%). The declines were more pronounced in the soybean (-6.13%) and agribusiness (-4.78%) segments. In contrast, the inputs segment registered growth (1.92%), as did agribusiness, with an increase of 17.06% in the number of employed people.
Foreign trade
In the second quarter of 2024, exports of the soybean and biodiesel chain — including raw soybeans, soybean meal, soybean oil, glycerol, biodiesel and soy protein — totaled 48.98 million tons, representing a decrease of 3.71% compared to the same period of the previous year. The exported value also decreased by 20.87%, totaling US$ 24.24 billion, reflecting a slowdown driven by the fall in international prices, lower soybean production in Brazil and increased domestic demand.
Target markets
In the second quarter of 2024, export volumes showed growth in some key markets compared to the same period in 2023. There was an increase of 2,88% in exports to China and 8,56% to East Asia. The Middle East also recorded significant growth, with an increase of 18,10%. As for Africa, the increase in export volumes was 23,17%. These destinations together accounted for 75% of Brazilian exports in the soybean and biodiesel chain in the period.
On the other hand, exports to the European Union fell by 3,26%. Southeast Asia recorded a reduction of 9,89% and North America saw a significant drop of 37,27%. Together, these regions accounted for 20,54% of the total export volume. There was also a reduction of 54,60% in exports to “Other” destinations, indicating a lower diversification in external markets.
Source: Cepea/Esalq | agrolink
