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Agribusiness GDP expands by 6.75% in 2020

Posted by Rafael Moro

The Gross Domestic Product (GDP) of agribusiness grew 6.75% from January to July 2020 compared to the same period last year, according to the Confederation of Agriculture and Livestock of Brazil (CNA) and the Center for Advanced Studies in Economics Applied (Cepea).

The result was driven mainly by the record grain harvest, which has guaranteed meeting the growing international demand and the domestic market, and by exports, given the “China effect”, which favored the profitability and competitiveness of the sector with the devaluation of the Real against to the dollar.

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Primary activity (within the gate) helped boost the result in the first seven months, with growth of 18.46%. Services and inputs expanded by 6% and 2.4%, respectively. Only the agribusiness had a drop of 0.37% in the year, still reflecting the effects of Covid-19, being the link most affected.

In the agricultural sector, GDP increased by 4.3% in the first seven months of the year compared to the same period in 2019. The result mainly reflects higher prices, with emphasis on coffee, corn, soybeans and wheat, as well as expectations higher production in the current harvest, with a record grain harvest and expansion to products such as coffee and orange.

The livestock production chain increased 12.25% from January to July, with significant expansion in all links, driven by the appreciation of animal proteins, and in July the upward movement was intensified.

July - In the monthly performance, the agribusiness GDP grew 1.26%, the seventh consecutive increase. The primary sector grew 2.95%, followed by services (1.03%) and inputs (0.55%).