Diversification in the economy avoided the impact of the crop failure, assesses Riedel – Economy

The failure of the 2023-2024 harvest in Mato Grosso do Sul will not affect the State’s GDP (Gross Domestic Product) growth projection for this year. The accelerated pace of diversification of the economic matrix avoided the negative impact of agribusiness losses.

“The crop failure does have an impact, but less than at other times”, pointed out the state governor, Eduardo Riedel. According to him, Mato Grosso do Sul is experiencing a phase of industrialization, and the sector has a robust participation in the formation of GDP.

The industry expects to generate R$34.2 billion in resources this year, which represents approximately 18% of the R$185 million estimated for Mato Grosso do Sul’s GDP. For next year, the sector’s estimated growth is 8.5%, which is expected to reach R$37.1 billion and, in 2026, it will be R$40 billion, an increase of 8%.

The five main products exported by the Mato Grosso do Sul industry in January, in terms of revenue, were: cellulose; frozen boneless beef meat; other cane sugar; bagasse and other solid residues from soybean oil extraction; and flours and pellets from soybean oil extraction.

“The harvests that failed are often compensated by this phase of economic growth that we are experiencing. A specific drop does not compromise the State’s results”, stated Riedel.

The governor recalled the growth rate for 2023, of 6.6%, and pointed out that the projection for this year is 5.2%, already absorbing the fall in the harvest. “It has an impact, but we can make up for this deficiency”, he concluded.

Crop failure – In this harvest, around 4.2 million hectares of soybeans were cultivated in Mato Grosso do Sul and the production estimate is 54 bags per hectare. However, with rising production costs and drought, many farmers are harvesting less than expected. This has caused major losses in producers’ revenue and debt in the sector.

In March, the expectation of a 20% drop in production compared to the previous cycle, losing 2 million tons, going from a record harvest of 15 million tons to 13 million.

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