Agribusiness confidence rises in the 1st quarter, says index calculated by Fiesp

The Agribusiness Confidence Index (ICAgro), surveyed by the Federation of Industries of the State of São Paulo (Fiesp), closed the 1st quarter of 2022 at 111.5 points, up 1.9 points from the previous survey.

In a note, Fiesp reported that the rise was driven “mainly by industries located after Porteira, the only segment among all those surveyed in which confidence actually improved”.

There was a decline in the indexes of industry Antes da Porteira and agricultural producers.

“Despite this difference, there was an improvement in the evaluations of the Brazilian economy among the agribusiness segments”, says the entity.

The ICAgro is calculated from the Industry Confidence Index (Before the Gate, which are agricultural input companies, and after the Gate, referring to food manufacturers) and the Agricultural Producer (agricultural and livestock producer).

The survey considers marks above 100 points to be optimistic.

The Industry Confidence Index (before and after the gate) advanced 5.2 points to 114.5 points.

Among the agricultural input industries (before the gate), there was a decrease of 3.7 points, to 107.7 points, but the entity highlights that most of the interviews took place in March, at the beginning of the war between Russia and Ukraine, when there was still much uncertainty about the supply and price of fertilizers.

The loss was offset by the increase of 9.0 points, to 117.4 points, among industries located after Porteira, whose optimism can be attributed in large part to the bulky exports of the sector.

The Agricultural Producer Confidence Index dropped 2.8 points to 107.2 points.

“It is still a result that puts the group’s spirits in the range considered optimistic by the survey criteria — but at the level closest to neutrality since the 4th quarter of 2018, when a period began in which the perception of producers has remained predominantly positive” , says the note.

Among agricultural producers, the drop was 2.9 points, to 109.1 points, especially reflecting the worsening of the terms of trade after the increase in fertilizer prices and fears of lack of supply.

The decline for the livestock producer was 2.6 points, to 101.4 points. There was a worsening in the perception of production costs with the advance of grains and urea, in addition to the high price of calves.

“The worsening of rural credit conditions also reduced the optimism of livestock producers,” the statement reads. “Unlike what happened to farmers, prices to producers have not eased the situation, with future prices for live cattle below the physical market since the beginning of the year.”