Commodity production in Brazil drives the country’s economy and provides food security for the whole world. Just so you understand the importance of this market, between January and September 2023, eight commodities accounted for almost two-thirds of Brazil’s exports.

During this period, foreign sales of these commodities amounted to US$ 163.2 billion, a 64.5% share of total exports. In a territory as large as Brazil’s, production is not homogeneous: some states contribute more to this performance.

In today’s content, you will understand:

• Which are the main commodity-producing states in Brazil?
• The relevance of this production at a global level.
• The role of hedging in managing risks in the agriculture chain.

Read on and find out!

Discover the 5 leading states in commodity production in Brazil

The country’s Gross Value of Agricultural Production (VBP) was estimated at R$1.159 trillion for this year, according to an estimate released in December 2023.

The figure is 2.5% higher than in 2022. With a growth of 3.8%, crops had revenues of R$813 billion. Livestock, on the other hand, despite a 0.6% drop, had revenues of R$346.9 billion.

The record grain harvest in 2023 and the export growth are factors that explain this result. In addition, almost 60% of this revenue is concentrated in 5 states: Mato Grosso, São Paulo, Paraná, Minas Gerais and Goiás. The information comes from the Brazilian Ministry of Agriculture and Livestock (Mapa).

Below, you’ll find details of the main commodity-producing states in Brazil.

1.    Mato Grosso

 Brazil’s leading agricultural producer, is the state with the highest GPV in the country. By 2023, it is estimated that it will reach R$ 184.6 billion, which corresponds to 15.9% of national revenue. The information is from Mapa.

This leadership is driven by soybeans, the country’s main commodity. According to a bulletin released by the Mato Grosso Institute of Agricultural Economics (Imea), the state harvested 45.32 million tons of soybeans in the 2022/23 crop. The volume characterizes yet another record cycle, with an increase of 10.98% compared to the previous season.

There was also an increase in the area under oilseed production, which totaled 12.12 million hectares. This figure indicates an increase of 5.67% compared to last year’s harvest. Between January and November 2023, MT shipped 27.76 million tons of the commodity to foreign markets.

Corn is another commodity that plays a huge role in the state’s production. For the 22/23 harvest, Imea reported a record in August, with an estimate of 52.2 million tons, as well as a productivity improvement.

2.    São Paulo

São Paulo accounts for R$ 142.9 billion in the Southeast’s GPV. The sugar-alcohol sector featured prominently in the results. According to October data from the São Paulo Agency for Agribusiness Technology (APTA), this was the sector with the largest share of São Paulo’s agribusiness exports, totaling 35.3%.

In all, it is estimated that US$ 7.23 billion were exported, with sugar accounting for 86.9% of the goods shipped from the sugar-alcohol complex between January and September.

3.    Paraná

Paraná is the largest producing state in the South, with a GDP of R$ 142.7 billion. As in Mato Grosso, soy is also one of the main products, with a record production of 21 million tons, according to the Department of Rural Economy (Deral).

The good performance was also seen in corn: production is expected to exceed 17.9 million tons. As a result, exports are expected to rise from 2 to 3 million tons, according to Deral.

In addition, the agency points out that Paraná has achieved the highest six-month production of chickens and hogs in its history. In the first half of 2023, the total was 1.07 billion chicken units. Hogs, in turn, represented 5.9 million tons.

 4.    Minas Gerais

 Estimates of the GPV of agriculture in Minas Gerais are expected to total R$123 billion in 2023. Some crops are showing revenue growth, such as coffee.

In the case of the 22/23 grain harvest, it should be a record, totaling 18.07 million tons, according to a bulletin from the National Supply Company (Conab).

5.    Goiás

 The Gross Value of Production (VBP) of Goiás agriculture is expected to reach R$98.43 billion in 2023. Goiás crops ended the 2022/2023 cycle with an estimated total production of 32.6 million tons of grain. The consolidated figures were released by the National Supply Company (Conab).

In addition, soybeans, Goiás’ main commodity, showed a positive result. The estimated volume of grain harvested in the state totaled 17.7 million tons. This represents 345,000 tons more than last year’s harvest (up 2%), according to Conab.

What are the global impacts of commodity production in Brazil?

Over the last two decades, Brazil has consolidated its strength in agribusiness and, consequently, its competition and relevance in the international market.

The country’s supply is essential for supplying various nations, with its role in the production of grains such as soya standing out. After all, the country is the largest producer on the planet.

Even though the Chinese economy has grown less rapidly in recent years, it is still the main destination for Brazilian exports. In the case of soybeans, for example, China imported 71.1 million tons from Brazil between January and November this year.

The Asian country is the biggest buyer of Brazilian oilseeds and accounts for 71.79% of the volume exported. The data is from October 2023, available from the Foreign Trade Secretariat (Secex).

Agribusiness exports generated U$139.58 billion, 36.61% of which was shipped to China, according to MAPA data.

In 2023, Brazil also became the world’s largest corn exporter. According to the United States Department of Agriculture (USDA), the country accounted for 32% of world exports in the 2022/2023 cycle. The total shipped was estimated at 57 million tons.

The energy sector is another that has strengthened its share of exports. Sales of crude oil and fuel oils reached 15.1% from January to September 2023. The figures were released in October by Secex. As a result, energy commodities ranked second among the main products shipped abroad.

hEDGEpoint: hedging for the commodities production chain in Brazil

You’ve seen that commodities in Brazil have a huge weight in the production chain and have repercussions throughout the economy, right? However, there is a challenge for market participants: volatility, as prices vary according to external factors.

These include climatic phenomena, geopolitical factors, and variations in the exchange rate. All these aspects can affect the value of the products sold by Brazilian producers. It is therefore essential to manage risks in the commodities market.

Want to know how? hEDGEpoint offers sophisticated hedging products combined with market intelligence and data analysis. Our professionals have a deep understanding of this sector and understand the local and global developments.

Talk to a hEDGEpoint professional to find out more!