1 BRAZILIAN AGRIBUSINESS BRAZILIAN AGRIBUSINESSOverview China Development Bank - MDIC Meeting Brasília, January 21 st, 2011.

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BRAZILIAN AGRIBUSINESSBRAZILIAN AGRIBUSINESSOverviewOverview

China Development Bank - MDIC Meeting

Brasília, January 21st, 2011

Sources: USDA and MAPA

2009 RANKING: BRAZILIAN PRODUCTION AND EXPORTS Exports

US$ Billion

Sugar 1st 1st 124 8.378

Coffee 1st 1st 81 3.762

Orange Juice 1st 1st 75 1.619

Soybeans 2nd 2nd 46 11.413

Beef 2nd 1st 142 4.118

Tobacco 2nd 1st 100 2.992

Ethanol 2nd 1st 48 1.338

Broiler 3rd 1st 146 5.307

Corn 4th 3rd 49 1.259

Pork 4th 4th 81 1.225

Main Products Production ExportsNumber of

Markets

AGRICULTURAL PRODUCTION INDEX: 1992-2019FAO-OCDE Projections

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“Brazil is the fastest growing agriculturalsector by far, growing by over 40% to 2019, when compared to the 2007-09 base period.” (OECD-FAO Agricultural Outlook 2010-2019)

Source: Ministry of Agriculture, Brazilian Institution of Geography and Statistics (pastures – 2006)

AGRICULTURE AREA2007/2008 HARVEST

Most of recent expansion

in agricultural area is on

pasture land

Source: Agriculture and Livestock National Confederation – June 2009

MAJOR AGRICULTURAL PRODUCTS IN BRAZIL GROSS VALUE OF PRODUCTION

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BRAZILIAN AGRIBUSINESS EXPORTSBRAZILIAN AGRIBUSINESS EXPORTSMAIN PRODUCTS – 2010*MAIN PRODUCTS – 2010*

Source: Ministry of Development, Industry and External Commerce. 2009

Elaboration: Ministry of Agriculture6

Total: US$ 73.9 billion

* From November 2009 to October 2010

BRAZILIAN AGRIBUSINESS EXPORTSBRAZILIAN AGRIBUSINESS EXPORTSMAIN DESTINATIONS – 2010*MAIN DESTINATIONS – 2010*

Source: Ministry of Development, Industry and External Commerce. 2009

Elaboration: Ministry of Agriculture7* From November 2009 to October 2010

Total: US$ 73.9 billion

Sources: Ministry of Agriculture, Brazilian Institute of Geography and Statistics - 2009

DOMESTIC CONSUMPTION AND EXPORTS

Roughly 70% of the Brazilian agricultural production aims the national market.

Elaboration: Ministry of Agriculture8

Harvesting soybean

Harvesting cotton

Corn field

Soybean field

GRAINS

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GRAINS - PRODUCTION AND AREA1991 to 2010

Source: National Company of Food Supply 10

37,9 35,6 38,5 36,6 36,9 37,843,9

49,1 46,2 47,7 47,357,9

68,3

81,178,4

82,4

100,3

123,2

114,7

122,5

131,7

143,7

135,2

149,0

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10

Mill

ion

tons

and

hect

ares

Harvested AreaGrowth: 24,9% = 1.2% / year

Production

Growth: 157,3% = 5,1% / year

MEAT Large scale, state of the art production

Biggest exporter of beef and poultry

¹ The meat consumption in Brazil is close to 100 kg / inhabitant / year, with more than 43 kg of chicken meat, 37 kg of beef and 14 kg of pork. Domestic demand accounts for about 70% of chicken production, 80% of beef production and 85% of pork production.

Source: Conab

MEAT PRODUCTION EVOLUTION

High domestic consumption and #1 world exporter

9.180

5,200

10.932

3,411

3.190

1,330

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

10.000

11.000

12.000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Th

ou

sa

nd

Me

tric

To

ns

Broiler: + 170% (95-09)

Beef: +70 % (95-09)

Pork: + 117% (95-09)

SUGARCANE

13

4,3

8,9

7,4

31,3

0

2

4

6

8

10

12

14

16

18

20

0

5

10

15

20

25

30

35

Ha

rve

ste

d a

rea

(millio

ns

ha

)

Pro

du

cti

on

Harvested area Sugar (million tons) Ethanol (million m³)

11,5

27,6

SUGAR AND ETHANOL: PRODUCTION AND AREA

Estim

ate

SUGARGrowth 2002-2009: 93.2% (8.6% p.y.)

ETHANOLGrowth 2002-2009: 142.4% (11.7% p.y.)

Sources: Ministry of Agriculture, National Company of Food Supply

Harvested AreaGrowth 2002-2009: 44.5% (5.4% p.y.)

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15

Brazilian Coffee

One country, many flavors

FRUITS: Diversity and

Good Quality

MILK

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MILK

Source: Milk National Forum – Brazilian Confedeeration of Agricultrue and Livestock

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Increasing production lead to self sufifciency

PLANTED FORESTS

(Mil

lio

n h

a)

Hardwood

5,5

1512

18

40,5

05

1015202530354045

m³/ha/year

Conifers

3,5 2,5

10

22

37,6

05

10152025303540

m³/ha/year

Source: ABRAF

Forestry productivity

Planted forests - 6.8 million ha support a diversified wood industry Biggest world exporter of hardwood pulp Highest productivity country in the world Largest growth potential

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FOREIGN INVESTIMENTFOREIGN INVESTIMENTIN AGRIBUSINESSIN AGRIBUSINESS

World population growth with increasing per capita income

Continuous need of food production increase

GLOBAL TRENDSGLOBAL TRENDS

Shortage of new areas for agricultural production

Challenges to food security

Increasing demand for higher-quality, better, protein-intensive food (i.e.meat)

BRAZILIAN AGRIBUSINESS BRAZILIAN AGRIBUSINESS COMPETITIVE ADVANTAGESCOMPETITIVE ADVANTAGES

Strong, thriving economy & Institutional framework

Leadership in tropical technology

Natural resources abundance (land, water, solar energy)

Farming vocation & Business entrepreneurship

STRONG, THRIVING ECONOMY &

INSTITUTIONAL FRAMEWORK

Social inclusion & income distribution (upgrowth of middle class)

Investment enhancement

Consolidated democracy, with stable legal and institutional framework

Infrastructure long-term investment program, with strategic actions

Sustainable growth based on macroeconomic prudential policies

Robust fiscal rules (primary surplus & rigid control of public deficit)

Low external vulnerability (with free capital flow)

Land investments in Brazil follow well established regulatory procedures

permitting several forms of access to foreign investors

EVOLUTION OF FOREIGN DIRECT INVESTMENTS IN BRAZIL

2001-2009

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FOREIGN DIRECT INVESTMENTS By origin - average 2007-2009

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STRONG, THRIVING ECONOMY & INSTITUTIONAL FRAMEWORK

No restrictions on commodity exports

-50

-40

-30

-20

-10

0

10

20

30

40

50

60

70

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10*

U S

$

b

i l

l i

o n

61.2

17.4

-43.8

BRAZILIAN TRADE BALANCE (1990 – 2010*)

Source: Ministry of Development, Industry and Foreign Trade

Elaboration: Ministry of Agriculture *Last 12 months (Nov09 – Oct 10)

TOTAL

AGRIBUSINESS

OTHERS

STRONG THRIVING ECONOMY & INDUSTRIAL FRAMEWORK

INFRASTRUCTURE LONG-TERM INVESTMENT PROGRAM

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LEADERSHIP IN TROPICAL TECHNOLOGY

Continuous & persistent public and private investments on R&D

Opened partnerships with other countries

Expressive results of productivity

Efficient use of natural resources

Producer Support Estimate (Public Support to Farmers)

1%5% 6%

9%14% 12% 14%

21%

26%

30%

50%

Ne

w

Ze

lan

d

Au

tra

lia

Bra

zil

Ch

ina

Me

xic

o

US

A

Ru

ss

ia

Ca

na

da

OE

CD

E.U

.

Ja

pa

n

Source: Organization for Economic Cooperation and Development

Brazil’s competitiveness

doesn’t rely on subsidies.

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FARMING VOCATION & BUSINESS ENTREPRENEURSHIP

Harvesting soybean

Sowing corn(2nd harvest)

Scale, mechanization

Two crops in the same year without irrigation

No tillage (environmentally friendly)

DOUBLE CROPPING - CORN AFTER SOYBEAN

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TECHONOLOGY and ENTREPRENEURSHIP

Direct Investment on Projects (Transportation, Storage, Harbourage)

Production

InfrastructureFood

Processing

Distribution Logistics

Machinery and Equipments

The agribusiness productive chains offer several possibilities for foreign investors:

Capital Markets (Stocks, Investment Funds)

Contract Farming (payment in products)

Partnerships and Joint Ventures

FOREIGN INVESTMENT IN AGRIBUSINESS

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Ministry of Agriculture, Livestock and Food Supply

Department for Agribusiness International Promotion

Esplanada dos Ministérios, Bloco D, 3º Andar, sala 338

70043-900 - Brasília - DF, BRAZIL

Phone: +55 (61) 3218-2425

E-mail: [email protected]

www.agricultura.gov.br

Maurício Fleury CuradoAdvisor for Foreign Investment

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