With the 2014 planting season underway, Marcelo Lüders of Correpar analyzes the Brazilian bean market.

By wpengine

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2013 Harvest

In 2013, Brazil had its worst bean harvest in the last 12 years due to the following factors:

  • Planted area decreased as many growers switched to soy.
  • Overall bad weather.
  • Disease and plague, including Helicoverpa and Bemisia Agentifolli, spread BGMV bean golden mosaic, resulting in lower yields on irrigated land. Likewise, heavy pesticide use (around 15 applications) led to increased costs, which skyrocketed by 40 to 45%.

According to official reports, the total production of the 2013 harvest stood at 2.8 million MT, while domestic demand for 2013 had been estimated at 3.5 million MT.

This “perfect storm” led to higher prices for carioca beans, which accounts for around 75 to 80% of total bean demand in Brazil. Further, in 2013, feijao carioca (phaseolus vulgaris) became the most expensive bean variety in the world. For several months, a kilo stood at US$ 3.37 at local supermarkets and grocery stores.

This situation seriously impacted Brazilian politics, as the media started to cover the rapid price increase in one of the basic foods in the Brazilian diet. Eventually, the Ministry of Planning decided to eliminate the 10% tariff on bean imports until November 30, 2013. But because Brazil is the only country in the world producing and consuming cariocas, this initiative only benefited black beans, which account for around 15% of the market.

The international situation wasn’t promising, either. Argentina had a disastrous crop, so the main alternative was China. Brazilian bean imports are expected to top 238,000 MT, which would set an all-time record. China bean imports, however, particularly those in September and October, had quality issues; shipments were labeled “high risk containers” with 20 to 30% of the product damaged.

Brown Eyed Beans

The situation with brown eyed beans is different, as Brazil has been a very aggressive exporter. Exports have been climbing rapidly for both polished and non-polished types. This year, despite high domestic prices, Brazil exported around 22,000 MT of brown eyed beans. Exports to the Middle East and Asia have been increasing year after year, due to the overall excellent quality of this sortex-free product.

2014 Harvest Outlook

As harvest for the third season of the year begins (Brazil has three harvest seasons per year), planting for the first 2014 season has also kicked off. The 2014 harvest is expected to take place next January.

The total planted area is projected to reach 1,147,500 hectares—around 989,500 hectares of carioca beans and 158,000 hectares of black beans. The estimated total production has been pegged at 1,211,800 MT. Overall, 48% of the production is expected to come from the Southern Region, where Paraná is the main growing state; 29.2% will be produced in the Southeast, mainly in Minas Gerais and São Paulo; 12.7% will come from the Midwest (State of Goiás, primarily); and 9.6% will be grown in the Northeast (Bahia and Piauí, mainly).

Black bean planted area in the south of the country will reach around 158,000 hectares and the overall production has been estimated at 180,000 to 200,000 MT. If these numbers are confirmed, Brazil will have enough stocks for the next six months. However, a corn trade agreement signed with China to boost Brazilian corn exports may lead to lower acreage. We’ll see if this occurs over the next few weeks.

The information from Argentina indicates that planted area for black beans, which are usually harvested in May, will increase. And additional imports from Bolivia and Paraguay will probably lead to fewer imports from China, at least until August 2014.

In 2013, many Chinese exporters gave Chinese black beans a bad name after shipping a very low-quality product. Brazilian importers will probably think twice before importing from China again.

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