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Brazil: Increase in contract based food supply

“We notice a trend in the market, which is mainly the increase of food supply based on contracts despite the spot market. It's an important change for the business chain stability and as well for the food safety. From one side, growers are more and more challenged to implement new certifications from the field, packing, social and environmental aspects. Moreover, the consistency of volumes in production is needed and fair prices from importers for the growers to have a sustainable business. From the importers side, it's important to offer their products to the final clients with control of origin and consistency. We believe this is a win win business model. Even though, we are aware that prices for the final consumer present less variation year round, then the prices on the spot market”, explains Fernando Barbosa Ferreira from MBR Company Brazil.



MBR was founded in 2014 in Sao Paulo in Brazil. Fernando: “We focus on exportation of quality Brazilian fruits. We supply a wide range of Brazilian fruits such as papayas, mangos, grapes, limes, melon, guavas, figs, persimmons, avocados and ginger. Our export goes to distributors and retailers, mainly in Europe, Canada and the Middle East. We export by boat and air, depending on the destination and product.”

Brazil is at the beginning of the season for the fruits produced in the Northeast of the country, especially mangos, melons, grapes and papayas. “The drought during the end of 2015/beginning of 2016 has affected the production of papayas and melons in Ceara and Rio Grande do Norte regions. In case of melons, the main growers moved production to other regions to be able to guarantee the contracted volumes. On the other hand, the climate conditions in the “Vale do São Francisco” are favourable for the season of mangoes and grapes. Therefore, we expect an increase of volume and quality improvement compared to the last three years”, continues Fernando.

He explains that according Abrafrutas (Brazilian Association of Fruit exporters), the exported value and volume decreased with about 5% in the first semester. There has been an outstanding increase in exports of limes, oranges and grapes. However, also a sharp decrease in apple export. Especially the limes did well the first semester as prices were attractive and it was a very important period to recover from the losses of last season.

Based on the question whether the political and economical situation of the country influences the daily operations, he replies that is has affected exporters, including MBR, mainly in consequence of the high volatility of our currency exchange rate. “After a welcome devaluation of the Brazilian Real in 2015, which allow exporters to increase competitiveness and profitability, the year of 2016 had been marked by high volatility and cumulated vaporization of our currency pressuring down exporters margins.”



“Michel Temer must assume definitely the presidency after the conclusion of the impeachment process in August. We expect some improvement on the political scenario, but he has a big challenge to fix the government financials and the economical situation and the uncertainties should remain for a longer time. Nevertheless, we are positive and working hard to increase exports and improve the supply to our clients”, ends Fernando.


For more information.
Fernando Barbosa Ferreira
MBR Company
Al. Campinas, nº728 - Cj 902 - Jd. Paulista, CEP: 01404-001 - São Paulo/SP
T: (+55 11) 2372-7751
E: fernando.ferreira@mbrcompany.com
www.mbrcompany.com