Following a substantial growth of over 21% in 2023, the GDP of the soybean and biodiesel supply chain is projected to decrease by 5.33% in 2024 due to a crop shortfall and its impact on agricultural services. However, the expected strong performance of the agro-industry, driven by biodiesel and soybean meal exports, is set to have positive effects on agricultural services and contribute to the overall GDP, preventing a more significant downturn in the supply chain.
The total GDP of the soybean and biodiesel chain is anticipated to be R$ 422 billion in 2024, accounting for 18% of the national agribusiness GDP and 3.9% of Brazil's overall economy. This information comes from a survey conducted by the Center for Advanced Studies in Applied Economics (Cepea), part of Esalq/USP, in partnership with the Brazilian Association of Vegetable Oil Industries (Abiove).
Economic Forecast and Industry Growth
The soybean GDP is projected to decline by 13.07%, while agricultural services may experience a decrease of 4.28% in 2024. Conversely, the agro-industry is expected to grow by 2.95%, with advancements across all sectors: 0.59% in crushing and refining, 2.6% in feed production, and a notable 36.47% increase in biodiesel production. The rising demand for biofuel positively impacts the GDP of the subsegment and influences the favorable outcomes expected for crushing and refining.
The relative prices of the production chain registered a decrease when comparing the first quarters of 2023 and 2024, leading to an estimated decline of 33.15% in real income. Consequently, the GDP is expected to reach R$ 422 billion in 2024. Despite the significant drop, this figure remains substantially higher than the pre-pandemic level.
Labor Market Dynamics
The workforce within the soybean and biodiesel production chain started 2024 with a 4.65% reduction compared to the first quarter of the previous year, involving 2.28 million people, reflecting the GDP's behavior. This decline is attributed to negative outcomes for soybeans and agricultural services, offset by job growth in the industries. The participation of the production chain in the agribusiness workforce (9.69%) and the Brazilian economy (2.28%) slightly decreased from 2023, although they remain the second-largest in history.
Foreign Trade Developments
In the first quarter of 2024, soybean and biodiesel chain exports (including soybeans, soybean meal, soybean oil, glycerol, biodiesel, and soybean protein) totaled 27.59 million tons, up 12.97% from the same period in 2023. However, the export value decreased by 11.33%, totaling US$ 12.42 billion due to a decline in export prices (-21.51% during the period). This scenario is similar to the trend observed between 2022 and 2023.
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