The dollar hit R$5.65, a 17-month high. For agribusiness, it cuts both ways
Up 1.62% in a day on fiscal doubts and high US rates. Exporters win; those buying inputs now lose.
To save you time3
- How much did the dollar rise?
- 1.62% on Thursday (12th), to R$5.652, its highest level in 17 months.
- Why?
- Uncertainty over approval of the fiscal adjustment, Banco do Brasil's results and expectations of high US rates.
- Who wins and loses in agribusiness?
- Exporters paid in dollars win; those still buying dollar-priced fertilizer and crop protection, or holding dollar debt, lose.
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The dollar rose 1.62% on Thursday to close at R$5.652: its highest in 17 months.
Why
- Doubts over the fiscal adjustment.
- Banco do Brasil's results, which sank its shares 8.35%.
- Higher-for-longer US rates.
Who wins
Exporters: soy, corn, meat, pulp and coffee are paid in dollars. Prices in reais rise without Chicago moving.
Who loses
Those still buying inputs: fertilizer and crop protection are priced in dollars, and urea was already rising. And anyone with dollar debt.
What I would watch
For farmers, the currency only helps those who locked in costs earlier and sell later. On the exchange, exporters (SUZB3, BEEF3, SLCE3) tend to gain; input importers and borrowers feel the opposite.
Sources
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