Although Rabobank predicts an extremely good outlook for Brazilian crops for 2014, weak international prices for commodities are expected, and with higher fuel costs, the extra production and export volumes will mean higher logistical costs throughout the year. Overall Brazil’s economy is slowing with estimates that the country’s gross domestic product (GDP) will fall from the current 2.3% to 2% or even lower in 2014 as the domestic market is dealing with rising interest and inflation rates. The outlook for Brazilian global poultry players is overall positive with falling grain prices and tight supplies in other protein sectors such as beef. However export growth is expected to be minor at between 1% – 2%. Brazilian beef exports are expected to continue to grow in 2014 on declining supplies from the U.S. and Australia, high demand from Asia, increase access to multiple global markets, and a weakening exchange rate throughout the year. The country’s area planted in soybeans is expected to increase by 7% or approximately 2 million hectares in 2014 as more growers switch from corn to soybeans, and Brazil’s corn production is expected to drop significantly – down 11% to 72 million tons as global supply exceeds demand. The weak exchange rate should help offset the corn price for farmers to an extent. After three years of surpluses and another surplus expected for this year, Brazilian sugar has limited potential for an upside, however ethanol should see slightly higher prices after gasoline prices saw a 4% increase at the end of 2013 combined with growing fuel consumption in the country.
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