China power cuts may affect Brazilian agribusiness, leaving Brazilian producers on alert. According to an analysis by Itaú, if these events have a relevant impact on Chinese economic growth, doubts arise on possible export impacts of Brazilian agricultural products. The high price of energy is due to some factors, such as the increase in demand in this transition period of the pandemic, the challenging climate scenario, the increase in gas prices, and the production restrictions to the burning of coal – the country’s primary source of energy, which represents 60% of the total – derived from environmental concerns and commitments to reduce emissions. “Furthermore, as the Brazilian government controls the price of energy in the country, this appreciation of coal and gas prices implies reductions in the margins of power plants, which discourages the increase in supply”, explain Itaú’s analysts. China is currently the main commercial partner of Brazilian agribusiness and has been responsible for approximately 34% of the sector’s total exports in 2020.
Sources: Revista RPAnews /Global Fert (*Translated by Ia Niani)