South American Markets Blossom
9 December 2008 For years, the potential of South America’s fields was a source of discussion. While most of the conversation has surrounded Argentina and Brazil, much of the continent showed great promise for a number of different crops, including maize, soybeans, and cotton, but also extending to tropical fruits, vegetables, sugar cane, and other crops.
However, difficulties including a lack of development, limited access to technology and modern farming methods and equipment, and unstable governments and economies have held the powerhouses of South America from taking full advantage of their large, fertile lands.
In the past two decades, that story has changed. Led by Brazil and Argentina, South America’s markets roared into prominence among the world’s best producers of several key crops. Now armed with biotechnology, there seemed to be no stopping these countries from becoming the top soybean growers in the world, and from increasing their competitiveness in maize and cotton.
In recent years, that growth was stunted when Asian soybean rust disease began paralyzing fields in Argentina and Brazil. The yield loss and additional expenses brought on by fungicide treatments cut back the optimism of the region. Other challenges – most notably the high cost of fertilizer and transportation costs in the countries’ still-underdeveloped rural infrastructures – also held development at bay.
However, there is still hope. Of particular interest is Brazil’s leadership role in biofuels, which have become a hot topic of conversation at the international level. Both the US and EU have made major commitments to biofuels, pushing the potential demand well above the world supply. Brazil not only has the crop patterns to benefit from this trend, it has experience – biofuels have been developed, promoted, and used in the country for years. Brazil is already a major producer of sugar cane-based ethanol, and has the ability to invest more in ethanol production to become a major global supplier for the ethanol-hungry North American and European markets.
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