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Euro's drop against the dollar could harm Brazilian fruit exports

Fruit exports from the São Francisco Valley to Europe, which saw a reduction in volume and revenue in the first half of this year due to weather problems, can now also be impacted by the devaluation of the euro against the dollar in recent weeks, according to an assessment by the ItaúBBA Agro Consultancy. This is because the Brazilian exporter receives in euros, but its production costs are pegged to the dollar.

In its report, the consultancy says that any political, logistical and economic risks in Europe can affect quotations and generate interruptions and/or decrease in the flow of commercialization of the fruit chain in the region of the São Francisco Valley and other fruit production hubs. The current risks are the unfolding war between Russia and Ukraine and the Russian threat to reduce gas supplies to Europe.

Europe is the destination for around 80% of the sector's exports and the São Francisco Valley is the main fruit exporting region in the country. According to the Brazilian Association of Producers and Exporters of Fruits and Derivatives (Abrafrutas), the heavy rains in the first semester in the São Francisco Valley affected the productivity and quality of the fruits produced, causing a reduction in exported volumes and a drop in prices paid in the market.


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