Brazil to reach USD 1 billion Fruit Exports in 2021 Despite Challenges

Fresh Apple

Fresh Papaya

Published Oct 23, 2021

Throughout 2021, Brazilian fruit export volume has increased dramatically, showing a 20% increase in the volume of exported fruit in Q3 of the year. Grapes stand out with an increase of 73%, followed by apple, 58%, mango, 26%, papaya, 21%, lemon, 19%, avocado 18%, and banana, 16%. Despite challenges like lack of containers and the increase in sea freight the exports grew. On the other hand, the fruit exports were driven by a limited demand for fruits in Brazil and the valuation of dollars against the Real.

Brazil’s agriculture-related exports have performed commendably during 2021 despite several production and logistics-related challenges. By the end of Q3, approximately 652 million dollars of fruit were sold, to the main destination countries as the Netherlands, the UK, and Spain. According to the industry experts, it is expected that by the end of 2021, the total sales revenue to the international market will reach USD 1 billion.

Exports of fruits like mango, melon, watermelon, and grape have intensified in comparison to the previous years. Grapes exports stand out with an increase of 73%, followed by apple, 58%, mango, 26%, papaya, 21%, lemon, 19%, avocado 18%, and banana, 16%. Pineapple, peach, and guava are other fruits that have shown increase in volume of exports.

Source: ITC Price Charts.HS Codes: Grapes (0806), Apple (0808), and Dates, figs, pineapples, avocados, guavas, mangoes, and mangosteens (0804).

Brazilian exporters have been facing several challenges throughout 2021 as the producers struggled with a sharp increase in production costs due to a shortage of workers. Furthermore, the traders are currently experiencing a shortage of material for packaging and higher logistics costs due to the lack of containers and high sea freight. The recurrence of extreme weather conditions like rains and frost had damaged some fruit crops. Although fruit exports are expected to reach the USD 1 billion mark, the profit margins are narrow this year compared to 2020.

Even though exporters are facing some challenges, agri export industry enjoys its record-high sales revenue thanks to the high quality of the harvest, the strong dollar, and weak domestic demand. There was a firm international demand for Brazilian fruit while the domestic demand plummeted due to severe income restrictions. With limited domestic demand in Brazil, stock for exports increased and producers focused on trading in the international market which is more attractive than the domestic market. On top of this, strong USD compared to the Brazilian Real has increased exports, bringing high revenues. The Brazilian Real has had one of the worst average dollar exchange rates in the past few months as BRL/USD has decreased over 50% in the last two years. Fruit traders received an attractive exchange rate for global sales in USD and encouraged them to engage in more exports with the competitively priced product.