Hike in diesel prices hit Brazil’s agriculture hard
The University of Sao Paulo’s College of Agriculture (Esalq) said that as compared to early 2017, farmers are now paying up to 9.05 reais ($2.50) more per tonne to move grains from fields in Mato Grosso state to Latin America’s largest port at Santos.
Brazil is a key global supplier of grains, meat, coffee and sugar — most of which reach ports by road.
The Esalq study estimated that the cost to move agricultural goods in Brazil was about 120 billion reais last year, with transportation accounting for 87.5 percent of that figure.
The diesel hike is a tremendous blow to the sector when the sheer volume of products is considered, Esalq wrote.
For instance, Brazil is expected to sell about 73 million tonnes of soybeans in export markets this season, according to projections by the United States Department of Agriculture (USDA). ■