Trade balance and commodities

Brazil is extremely dependent on commodity prices, and the successive declines seen in recent times call into question and highlight the vulnerability of the national trade balance.

Prices for ore, iron, soybeans, corn, and all other commodities planted and produced on home soil reveal the concern and anxiety of the agribusiness sector, whose only alternative is to keep everything stored until a change occurs.

However, for this to happen, it would be essential for Brazil to enter international markets, become a member of the OECD, strengthen its contacts with China, Europe and the USA, and, in addition, bring to most producing countries the status of generating pricing consistent with fundamental aspects, considering consumption, crop failure, importance, job creation and the lag in the international circuit.

Agribusiness has been making leaps in quality and has been the main instrument for strengthening, despite low growth and the reflection of the gross domestic product, notwithstanding the existing restrictions and the commodity price mechanism, which discourages us quite a bit.

The more you produce, the less you earn; this is the illusion of globalization, and the legal field must be involved so that Brazil can emerge from its stagnation and advance in protecting production, with objectives closely related to the external market.

Unlike developed nations, which can profit as much as they want from cutting-edge finished goods and technology, we remain dependent on things with little added value, already losing ground to manufactured goods.

And at this moment, when the national industry is showing visible signs of a profound slowdown, the losses from the fall in commodities will be a complex issue for the next government to resolve.

Tons of goods are stored in silos awaiting a significant price increase, large national companies are suffering from price drops, as is the case with ore and iron, shutting down major national producers who cannot escape this uncertainty.

Commodity exchanges dictate these rules with their eyes fixed on the outside world, from where they produce an X-ray of the rare appreciation and constant depreciation of products, without us having any role or the slightest influence in reversing this escalation that compromises us and places emerging countries on a path of production at reduced prices.

And the growth of the agricultural sector is fundamental for machinery and equipment, labor, ports and airports, and Brazil will need to double its production in the next decade to support population growth and supply most Asian and African markets.

While it is speculated that by 2050 China will account for half of the global GDP, with a record population, Brazil cannot continue in this vicious cycle of producing good quality goods and selling its commodities at outdated prices.

Latin America must unite, form blocs, and spread its unity so that developed countries will also back down from their forecasts and accept the demands of the producing nations.

Without a turnaround in the commodities market in the short term, the agribusiness sector has a less optimistic outlook, but public policies are essential and market integration is imperative.

Anyone looking at the sector with a new perspective will see in this concert the plausibility of keeping people in the countryside and giving them compensation commensurate with their ability to produce despite the series of harsh weather conditions that mark the difficult journey, always arid in every sense.