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Latest developments in Brazil's key agribusiness sectors, including planting updates, harvest outcomes, production forecasts, price movements, and more.
FX: We forecast the US dollar at BRL 5.75 by the end of 2025. US trade policy and interest rate differentials support the real in the short term. However, geopolitical and fiscal risks may lead to renewed depreciation.Tariffs: On July 30, the US government released a list of products exempt from the additional 40% tariff applicable to imports from Brazil as of 6 August. Orange juice and cellulose pulp were granted exemption, but coffee, beef, and sugar were not.Weather: July and August showed contrasting weather patterns across Brazil, marked by intense heat, isolated frosts, and uneven rainfall. Despite these variations, the dry conditions supported the harvest for grains, cotton, sugarcane, and coffee.Farm inputs: Despite an increase in fertilizer costs, Brazil is expected to see a rise in fertilizer deliveries, which could represent a new record for the country.Cane, sugar, and ethanol: NY sugar prices appear to have found a floor at USc 16/pound for now. Points to watch are international oil and gasoline prices plus new crop expectations in India, Thailand, and - looking further ahead - Center-South Brazil.Coffee: Short-term pressures continue to drive price volatility. After a sharp decline in June, coffee prices saw a strong rebound in August.Soybeans: Soybean acreage expansion in Brazil is expected to slow, with growth projected at just 1.5% in the 2025/26 season - well below the historical average of 3.5%. Despite limited area growth, current productivity trends point to a robust output of 175m metric tons in the 2025/26 season.Corn: Despite a record corn crop, intensified competition with US corn has slowed the pace of Brazilian exports since January 2025, which are down 25% YOY.Cotton: Brazil is set to deliver its third consecutive record lint crop, reinforcing its global leadership in cotton production. According to RaboResearch estimates, output in the 2024/25 season is expected to reach an impressive 4.0m metric tons.Beef: Exports in July reached an all-time high, with volumes surpassing the 300,000-metric-ton mark for the first time. The live cattle price began an upward trend, which is expected to continue through the end of Q4 2025.Orange juice: Favorable weather brings optimism about the current harvest. Prices already reflect a more balanced global supply and demand scenario after tariffs to the US were set at 10% instead of the proposed 50%.Dairy: Supply is still growing, but at a slower pace after a sharp increase in the second quarter. Producers' margins remain positive, supported by low costs despite lower prices.Pulp: The increase in supply from China and South America continues to put downward pressure on global pulp prices. However, a gradual recovery is expected from Q4 onward as production downtimes increase.
India's retail inflation accelerated to 2.07% in August as food prices inched higher over the previous month, but stayed well within the central bank's tolerance band, leaving room for another interest rate cut this year, reported Reuters. Annual retail inflation quickened from a revised 1.61% in July and was in line with a Reuters poll of 2.1%, data released on Friday showed. The Reserve Bank of India is mandated to not let inflation overshoot its tolerance range of 2%-6% for more than three quarters in a row.The world's fifth-largest economy is expected to expand at a pace of 6.5% this financial year - the fastest among major economies. However, low inflation has weighed on corporate earnings and equity markets, with tariffs of up to 50% on Indian exports to the US adding pressure.With price rise in check, growth risks worsening and major central banks like the US Federal Reserve set to cut interest rates, economists see room for further policy easing from the Reserve Bank of India this year.The central bank's rate-setting panel will deliver its next decision on October 1."While we see a pause by the RBI in the upcoming policy, we do see some scope for rate cuts worth 25-50 basis points opening up from December policy if downside risks to growth materialise," Upasna Bhardwaj, economist at Kotak Mahindra Bank, said.
India's policy repo rate is currently at 5.5%.The increase in headline and food inflation during August was mainly due to a rise in prices of vegetables, meat and fish, oil and fats, personal care and eggs between July and August, according to an official statement.Food prices fell 0.69% in August from a year ago compared with a sharper decline of 1.76% in July while vegetable prices fell 15.92% after a decline of 20.69% in the previous month.Above-normal rainfall in August, and an expectation of similar showers in September could damage India's summer-sown crops like rice, cotton, soybean and pulses and push their prices higher.Core inflation, which excludes volatile items such as food and energy and is an indicator of demand in the economy, was at 4.1% in August compared with 4%-4.12% in July, according to three economists.
Tax relief
New Delhi's tax cuts on food and hundreds of household and consumer items are expected to lower inflation in the coming months.Inflation is expected to remain low for the remaining part of 2025, supported by lower food inflation and consumption tax rate cuts, Sakshi Gupta, economist at HDFC Bank, said."With even a 50-60% pass through of GST cuts, we see FY26 inflation moving down by 20-30 basis points compared to our current estimate of 2.8%," she said.Weaker growth due to punitive tariffs imposed by the US on Indian exports could also keep companies' pricing power in check.
"We think downside risks to growth would be increasingly evident with global resets and monetary easing led by the Fed, and could open up space for easing in the rest of the year," said Madhavi Arora, chief economist at Emkay Global Financial Services.
Firm dairy product prices have pushed farmgate prices in New Zealand and Europe, rising 27% and 18% YOY, respectively. Well-supplied global feed markets have kept a lid on prices. Overall, good farmgate margins are supporting increased milk production, led by the US and New Zealand. Milk production across the Big-7 exporting regions will peak in 2H 2025, with growth continuing in 2026, but at a more moderate rate. On an annualized basis, milk supply in the Big 7 is forecast to increase by 1.6% in 2025 and 0.6% in 2026, resulting in a combined growth of 7.1m metric tons across the two years. The slowdown in milk production growth in 2026 is largely due to strong year-on-year comparables.In the US, milk production is gaining pace, on the back of herd expansion. In South America, milk collections are strong against weak comparables. The outlook across Europe is mixed, as a slow recovery is underway in regions affected by the bluetongue disease. Some regions are grappling with dry conditions, but supply growth in the EU is expected to be positive, led by Ireland and Poland.The Oceania spring flush is fast approaching. October will be the peak volume month for both Australia and New Zealand. While Australia is facing a weaker spring peak due to feed shortages and a smaller herd, New Zealand has a solid footing for a strong peak. The forecast payout is currently set at a record high, and seasonal conditions are broadly ideal in many regions in Oceania.Foodservice channels remain a key area to watch for demand settings. Foot traffic is sluggish in many major economies, and ongoing weakness in consumer confidence continues to weigh on discretionary spending among low- and middle-income consumes.Dairy demand in grocery channels is also underwhelming in many countries. Households are paying more for dairy products, as inflation in the dairy aisles is on an upward trend in some regions.
World Farming Agriculture and Commodity news - Short update 8th September 2025
China's chicken meat consumption is set to keep climbing in 2026, led by demand for white broilers, according to a new report from USDA's Foreign Agricultural Service (FAS). The agency said the trend reflects chicken's role as a lower-cost protein as households and foodservice operators substitute it for higher-priced meats in an uncertain economy. Institutional catering, such as schools and workplace cafeterias, is also providing stable demand. Younger and fitness-conscious consumers are adding momentum, with rising interest in fried chicken products and chicken breast meat in fast-food and retail sectors. In contrast, yellow broiler consumption is expected to remain weak, as its higher price limits growth in premium dining settings. FAS also revised its 2025 forecast upward, citing stronger demand in catering and fast-food channels. However, broiler slaughter volumes expanded faster than consumption, leading to ample supply and falling chicken prices.
Brazilian farmers harvested a record 171.47 million metric tons of soybeans and a record 139.67 million tons of corn in the 2024/2025 season, Reuters reported, citing Brazilian crop agency Conab on Thursday in its final grain production report covering the period.The final numbers represent a 1.82 million ton increase in soybean output and a 2.67 million ton hike in total corn production expectations compared to Conab's August forecast.Conab also revised soy area and yields for all seasons between 2020/21 and 2024/25, resulting in a cumulative increase of 13.12 million tons in estimated production during the period.Crushing data and soybean carryover stocks were also adjusted in the broad revision, Conab said.The agency upped Brazil's soy export forecast for the 2024/25 season, saying the country will ship 400,000 tons more than it expected last month, or 106.65 million tons.Brazil sells most of its soybeans to China and continues to book sales due to stalled trade talks between the United States and China halfway through the prime of the US soybean marketing season.Meanwhile, the new total corn production forecast reflects an expected increase of almost 2.5 million tons in Brazil's second corn output, Conab said.Brazil's second corn is planted after soybeans are harvested in the same areas and is mainly exported in the second half of the year, in direct competition with US farmers. Brazilian farmers, who have nearly finished harvesting their 2024/2025 second corn crop, have already begun cultivating their 2025/2026 first corn in southern Brazil, Conab said."Although the temperatures were not ideal, the frequency and volume of rainfall allowed for good water retention in the soil," Conab said about Brazil's first corn.Brazilian farmers also began sowing their 2025/2026 soy crop in Parana state and could harvest north of 180 million tons in the new season, according to private forecasts.
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