Thumper --- Soybean exports

The United States has historically been the world's leading soybean exporter, but its export share has steadily declined since the early 1980s. Contrary to the United States, Brazil was not a key player in the world soybean market as recently as the 1980s, the country's export share has been steadily increasing and even surpassed the US export share from 2016 to 2019. Brazil's soybean export share expanded by more than 41 percentage points, while the US share fell by 44 percentage points relative to the 1980s (FAO-STAT, ). Together these two countries have accounted for at least 75% of soybean exports over the past 40 years. On the import side, China is the largest soybean importer, accounting for 63% of global soybean imports in 2016, a threefold increase over its share of world imports in 2001 (Carlin, 2019). Focus Economics reports that despite exhibiting better-than-anticipated economic performance in 2022, Brazil’s short-term prospects remain bleak. The country’s high interest rates, coupled with slow but high inflation are hampering private consumption, while external demand for Brazilian exports is weakening due to the global slowdown. Additionally, newly elected president Lula da Silva’s challenge of achieving fiscal consolidation adds to the uncertainty, as evidenced by social unrest and massive riots provoked by his supporters in January. Brazil is the largest and most populous economy in Latin America, with GDP worth around a third of the regional total. Brazil is also the third-largest emerging market after China and India. Brazil has a diverse economic structure encompassing agriculture, mining, manufacturing, and services. Brazil is a global leader in agriculture, renowned for being one of the world’s largest producers of coffee, soybeans, beef, sugar cane and ethanol. The sector benefits from advanced agricultural technology and vast arable land. Brazil is also an important producer of iron ore and oil and holds large reserves of minerals that will be integral in the green transition, such as graphite, nickel, manganese, and rare earth elements. In 2023, population reached 218.6 million (CIA World Factbook Est.), an increase of 43.6 million since 2000. By population Brazil is the seventh largest country in the world. The median age was 34.7 years in 2023, 11.8 years greater than in 2000. Fertility has been falling rapidly but it is still 1.8 births per female. The downward trend will decelerate in the future, reaching about 1.6 births per female by 2030. Sterilization, abortion, and programs for family planning are driving the decline. The number of those over 65 years more than doubled in 2000-2022, reaching 22.9 million by the end of that period. However, this group still accounts for just 10.2% of total population – a relatively small share compared with most countries. Demographers expect the ageing process to accelerate in the future, with the share of those over 65 years reaching 13.6% of total population by 2030. Brazil is a member of the Common Market of the South (Mercosur), a trade bloc that includes Argentina, Bolivia, Paraguay, and Uruguay. Venezuela’s membership in the organization was suspended in August 2017. After the Asian and Russian financial crises, Mercosur adopted a protectionist stance to guard against exposure to volatile foreign markets and it currently is negotiating Free Trade Agreements with the European Union and Canada. Their trade policy is protectionist: Average tariff rates are more than double the Latin American average. USDA’s Office of Agricultural Affairs (OAA) in Sao Paulo, hereinafter referred to as FAS Post Sao Paulo, reported that in 2022, imports of consumer-oriented products by Brazil reached US$5.2 billion, an 8% increase compared to the previous year. The U.S. States maintained its position as the fourth major supplier, with a 5.4% market share. On the other hand, European countries, direct competitors to the U.S. gained two percentage points of market share, accounting for 30% of the market. Both are positioned at a higher price level and offer products with similar quality and standards; therefore, it is plausible that U.S. companies have considerable room to grow in the Brazilian market. Brazil is the third largest market in South America for the export of U.S. processed foods. In 2022 Brazil imported US$314.9 million in processed foods, and an increase of 24%. In 2023, U.S. exports to Brazil decreased 8% to US$288.1 million. That equates to about US$26.8 million which adds to the U.S. trade deficit in food and agricultural products. Although Brazil is going through a difficult time economically, the food sector is a key one for the country and has been less affected than other sectors of the economy. Brazilians spent around 17% of their disposable income on food and this remains unchanged. Brazil continues to be an attractive consumer market. Half of the country’s population is considered middle class and around 16 million are at the top of the social pyramid, the very rich consumers.