Brazilian growth weakens

How are the BRICS doing? Two years ago we talked about these emerging countries. Opinions are divided as to the question whether or not these markets are still growing. Some are not convinced the BRIC countries have a future. However, rumors persist that these economies are doing just fine, and the opportunities in business are enormous. Therefore, we will visit Brazil, Russia, India, China and South Africa once more, considering each separately.

Cooperation between the countries themselves is still intense. Recently, they even decided to set up a new bank, which will be headquartered in Shanghai. The BRIC countries meet every year (since 2005) and together they contain forty percent of the world population. They collectively have $ 4,400 billion in foreign currency.

The question is: are the BRICS still as strong as previously claimed? And what does this mean for the fruit and vegetable sector?

Brazil
Economically, there are mixed feelings about Brazil. After growing by an average of 4.5% in the 2004-2010 period (and being promoted to BRIC), the Brazilian economy has been struggling for several years in a row.

World Cup only a short boost
Playing host to a World Cup is invariably considered to boost economic impulses. The 2014 FIFA World Cup created about 1 million jobs and poured some 10 billion euros into the Brazilian economy, according to the study commissioned by the Ministry of Tourism. After the World Cup, however, there was no tremendous economic growth, only a brief boost. The country was even in recession.

Brazil’s economy shrank by 0.6 percent in the second quarter, after already witnessing a decline of 0.2 percent in the first three months of the year. Analysts have adjusted 2014 growth forecast to below 0.29%. However, the government expects the economy will grow by 0.90 percent this year. According to the Dutch Rabobank, Brazil will only manage to grow if the country succeeds in increasing both its investments and its productivity.

Opportunities for fruit and vegetable sector?
After China and India, Brazil is the largest fruit exporter in the world. The various Brazilian fruits are sold in over 110 countries on all five continents. Approximately 711,000 tons (worth 473.5 million euros) was exported in 2013, four percent more than in 2012. The Netherlands is the largest buyer.

Europe has become less attractive for Brazil in recent years. This mostly has to do with the growing purchasing power in the country. It appears that this trade will only increase in the future. Conversely, with the current Russian boycott being in effect, Brazil has opportunity to strengthen the ties with Russian traders. Russia is of course also part of the BRICS, which facilitates the trade.