Brazil Worth The Risk
8 January 2008 Brazil’s agricultural economy is riding high on the strong international prices for commodities, in particular for corn and soybeans (see above item). However, there are still companies that get nervous about the prospect of doing business in the country, due to the situation a few years ago which saw growers amassing debt, and unable to pay for the products they used, often leaving distributors or manufacturers to eat the cost.
However, following successful seasons (particularly for commodities), the situation has turned around in the country. Of course, there remains the risk that a wave of soybean rust or another disease could hit, unexpected pest pressures could emerge, or unfavorable weather could turn the season upside-down, putting input suppliers in the same poor positions.
But as it stands now, the potential for sales in Brazil may be too strong to ignore. Already many of the multinationals are reporting strong markets in Latin and South America as the causes of sales increases, and as growers make money and prices stay strong, better yields are going to be sought, which means more crop protection, fertilizers, and other inputs in the coming seasons.
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