Brazil is one of the best opportunities to invest in the world. The largest country, and also the largest economy ,in Latin America, it has a 214 million people market, the sixth most populous country in the world, with a GDP of US $1.9trillion. According to the International Monetary Fund’s, IMF, Brazil is ranked as the twelfth-largest economy in the world. But, those numbers don´t explain, by themselves why to invest in Brazil.
If we are going to summarize, despite the expressive numbers on the size of the consumer market or GDP, what makes Brazil a great investment opportunity is that, unlike other economies of similar size, Brazil is not yet a mature economy. In other words, Brazil is a country in economic transition, where much remains to be done. In this article, we will make some explanations about the opportunities that foreign investors can find in Brazil, from the point of view of a Brazilian foreign trade professional, with over 40 years of experience in the area and deep knowledge about the country, and, how Brazilians perceive foreign investment in the country. And also, how foreigners, in their turn, see Brazil.
Brazil is one of the largest exporters of agricultural products in the world
Brazil is the number one producer, and exporter, of soybeans in the world, and is, also, a great exporter of sugar, cereals, corn, oilseeds and citrus fruits. That is something you probably already know. What you may not be aware is that In the last 50 years, Brazil invested a lot in scientifical research to make it`s agribusiness more efficient. So , the Brazilian farms can produce more with less use of land, what allowed the agricultural production to raise at the same time that the forests and other native biome could be preserved.
Brazil is one of the largest producers and exporters of beef
In 2021, Brazil exported 1,867,594 tons of beef ,a volume 7% lower than the sold in 2020. Despite the drop in quantity, due to the rise of prices, the revenue rose 9% in the period, totaling US$ 9.236 billion. But the market improved in 2022. From January to June, beef shipments totaled 932,340 tons, 27% above the volume shipped in the same period of 2021, generating a revenue of US$ 5.62 billion in the first half of 2022. In 2022, Brazil also became the country that most exports beef to the United States. This is the 1st time that Brazilian protein rises to the top of the list, after overtaking Canada, Australia, New Zealand, and Mexico. According to data released by the USDA (United States Department of Agriculture)
Brazil is the largest producers and exporters of poultry
Brazil is the largest exporter of poultry in the world, and the country`s performance in the first half of 2022 was also positive. In the first six months of the year, the country sent 2.230 million tons, 8% more than in the same period last year. In revenue, the volume grew 37% compared to the first half of 2021.
Brazil offers Quality and quantity in food
Today, Brazil produces enough food for an estimated of 1.6 billion people, that is, a surplus of almost 1.4 billion, since Brazilian population is 214 million, emphasize, in chorus, representatives of EMBRAPA, the government organization responsible for scientific research for agribusiness and FARSUL, the Federation of Agriculture of Rio Grande do Sul, one of the Brazilian States. Looking to the future, Brazil is the biggest global bet so that, by 2050, there will be food for everyone on the planet. But the Brazilian agribusiness offers quality, besides, quantity. Executives from Brazilian food companies with experience in many of the most exigent consuming markets in the world state that Brazilian products are perceived by the costumers as real food.
Why to invest in Brazil´s agribusiness
Numbers don’t lie. And, as the numbers show, Brazilian agribusiness is a powerful and competitive industry on a global scale, but still with room to grow and markets to conquer.
Traditionally, agriculture has been a staple national sector, and despite the effects of the Global Financial Crisis, Brazil continued with strong agricultural output.
For companies looking to invest in this sector, there are ample opportunities. One example of an opportunity includes the introduction of new technology and equipment to improve efficiency and increase agricultural output. This innovative section of agribusiness, known as ‘agritech’, also contributes to a wider national agenda of ensuring and improving food security.
It’s therefore in Brazil’s interest to support agribusiness growth on a medium and large scale, and improve outputs generated by the large proportion of small, family-owned agriculture businesses.
Brazil is a clean energy powehouse
The most used energy sources in Brazil are the renewable ones, with great emphasis on hydroelectric power, the main base of our energy matrix. According to 2019 data from the National Interactive Energy Balance, 64.9% of the energy consumed in Brazil comes from a hydraulic source.
Brazil uses 83% of renewable sources for energy production, while the world average is 25%. In addition to more sustainability, this also generates lower operating costs for plants that choose renewable energy. In addition to hydropower, Brazil’s energy matrix is also divided into: natural gas (9.3%), wind (8.6%), biomass (8.4%), coal and derivatives (3.3%), nuclear (2.5%), petroleum derivatives (2.0%), solar (1.0%).
Ethanol production is a great investment opportunity
Brazil produces more ethanol than Asia and Europe combined and is the second largest producer in the world, surpassed only by The United States. However, Brazilian ethanol has some advantages in comparison with US Ethanol: Brazilian ethanol is made from sugarcane, while American ethanol is made from corn.
sugarcane ethanol is more competitive in terms of productivity and time.
One ton of corn can produce more alcohol than one ton of sugarcane, that´s right. But one hectare of sugarcane produces up to 90 tons of cane, enough to produce up to 8,000 liters of ethanol. Corn yields a maximum of 20 tons per hectare, which can be transformed into 3,500 liters of ethanol. So, it´s possible to produce more ethanol using less land.
Brazilian ethanol is faster and easier to produce
In addition to the lower need for land use, the production of ethanol from sugarcane is very quick and easy compared to ethanol from corn. Since ethanol is a by-product of sugar, within 11 hours of fermentation, molasses ferments and turns into ethanol.
Solar power is an investment opportunity in Brazil
Sun power still has a small share of the Brazilian energy matrix, 1%, but it is a great investment opportunity, to the point of solar energy is the source that most increased production in the country, which currently occupies the 13th position in the world.
Brazil is the country that most receives solar irradiation in the world. As it is located close to the equator line, the country receives a high incidence of sun throughout the day, with little variation throughout the seasons, due to the characteristics of the planet’s translation. According to the Brazilian Atlas of Solar Energy, the country receives, throughout the year, more than 3 thousand hours of sunshine, corresponding to a daily solar incidence that can range from 4,500 to 6,300 Wh/m².
Investment Opportunities in Brazil go far more than commodities export
Brazil is major exporter of soybeans, corn, coffee, beef and poltry, and, in addition to food, is also a major player in the oil, pulp and Iron Ore, a product in which the country is the second largest producer in the world. But, Brazil has become a top-tier economy with a growing technology sector and an inward focus that should reduce commodity dependence. Opportunities to invest in those industries in Brazil include U.S.-listed ETFs, American depository receipts (ADRs), and securities listed on Brazil’s own stock exchange. Many of these technology companies are connected to the commodity industry, because they are focused in creating new solutions to help cheaply produce a wide variety of industrial and consumer goods, that are exported to many countries in the world.
Main destinations for Brazilian exports
Brazil is a key raw material supplier to countries like China, the U.S., and Argentina, which are its three top export destinations. China leads the way receiving $64.3 billion worth of Brazil exports, while the U.S. and Argentina are distant contenders at $29.3 billion $15 billion, respectively. Brazil is a stable economy
Brazil also has a relatively stable economy, specially if it is compared to other South American countries. After taking steps toward fistability and liberalizing its economy in the 1990s. The country has a fast-growing middle class (as is present across the entire Latin American region), meaning that there is a huge consumer market.
The size and diversity of the consumer market has created a wealth of exciting commercial opportunities for foreign businesses looking to access new clientele within Brazil. Most of the population is youthful and is up for new technology adoption. 85% of the population lives in urban areas. When it comes to entrepreneurship, Brazil is one of the top entrepreneurial countries in the world.
Brazil offers opportunities to those who invest in technology and innovation
Brazil has a huge population and it has all the pillars that support a strong digital economy. A large portion of the population is equipped with fast internet connectivity and smartphones. To give you an idea, Brazil has the second-highest number of Facebook and Twitter users. What makes their digital economy even stronger is that it has more smartphones than people.
Do you want to invest in Brazil?