ICOA Castor Newsletter – 2021 December

By:  Andrés Morales

Pleased to share some news from Brasil. Daily covid cases are now down to approximately 13k people from a peak of almost 80k during the worst period of March through June of this year.  The total of the population now vaccinated is at 67%. Basically, all services and businesses have returned to normal in the country, by adopting all required safety health measures to avoid contamination, which includes the limitation of crowds.

Brazilian GDP in 2021 is expected to increase by 5.3% thanks to the continuous consumer spending, while 2022 forecasts a slowdown with GDP dipping to 1.5%, mainly due to the higher inflation and interest rates, curtailing jobs and consumer spending. The governmental financial assistance to distressed families, in place since Covid emergency, will also be reduced in 2022.To be noted that 2022 will be an election year for president, state governors and senators, with all eyes on possible results and influences on the economy and the daily lives of the population.

With lesser rains this year, energy costs increased 25% as most of our energy is based on hydroelectrical plants. The increase in costs of fossil/biofuels added to the pain, with the need to increase energy production at thermoelectrical plants. Biodiesel blending admixture was reduced from 13% to 10% to contain production costs, due to soaring costs of soyabean oil used as the main production feedstock.  Total consumption of biodiesel in 2021 is projected at approximately 6 million m3.

It has been long time since we had such good rains in the northeastern semi-arid regions during this past month of November 2021. This region accounts for most of the Brazilian castor area (55k has in 2020) planted on dry and irrigated plots.

The higher valued price of castor beans this year shall also be a driver for a substantial increase in the area, which we are also expecting in the Midwest and southeastern states (Mato Grosso, Minas Gerais, Goias, west Bahia, etc), where plots are more extensive and mechanically cultivated by professional farmers. It should be noted that improved harvesting machines performed much better during 2021, with lesser field losses, which in itself shall motivate farmers to plant again this year, as well as the better costs/prices or of castor when compared to corn. The estimated yields this year in this farming segment were between 1,200-1600 kgs/ha on drylands and 2,800 kgs/ha on irrigated areas, which is a significant improvement.  We expect a safrinha (2nd year production) crop during the months of February and March on the drylands in the northeast semi-arid region, which should allow us to bridge needs prior to the main harvests in August/September on both drylands and mechanized areas.

Wishing you all to remain in good health. May 2022 be a safer and calmer year for the world in what concerns the covid pandemic and all its consequences.

All the very best.