Mauricio Mendes Gilberto Tozatti International Citrus Economics Conference Oct 2010, Florida - USA
AgraFNP and GCONCI An information and consulting agribusiness company Citrus Consultants Group A nonprofit organization which join 17 independent agronomists
Long Term Outlook The study consisted in the discussion of upside and downside qualitative factors (sensitive) and probabilities that influence a long term Brazilian citrus crop projection The main aspects considered in this study was: PRODUCTION ECONOMIC DISEASES Acreage Cost of production Sudden Death Growers Profitability Citrus Canker Trees and production Gross margin C V C Level of technology Cost opportunities Blossom Blight Other crops HLB (greening)
PRODUCTION ECONOMIC DISEASES
Brazilian States Participation São Paulo State represents 78% of the total production and 70% of the total area. Source: IBGE, 2008
Number of Citrus Growers
Citrus Growers Participation in the Supply Source: AgraFNP
Citrus Growers Range by Number of Trees (from 2001-2009) Total 2001 : 15.000 2006 : 13.200 2009 : 12.627 Thousand trees Source: Markestrat
% Citrus Growers by Number of Trees (from 2001-2009) Thousand trees Source: Markestrat
Citrus Growers Ranged by Yield 2009/2010 Season Range productivity (boxes/ha) % ha % Boxes Volume of Boxes by Range Productivity (million) Productivity boxes/ha > 1.400 2% 5% 16 1.655 1.100 and 1.399 7% 13% 41 1.209 800 and 1.099 19% 29% 92 933 500 and 799 28% 30% 95 639 200 and 499 36% 21% 67 345 < 200 8% 2% 6 138 TOTAL 100% 100% 317,4 607 TOTAL OVER 500 56% 77% 244,4 909 TOTAL DOWN 499 44% 23% 73 280 Based on the data from associated processing plants companies Source: Markestrat
Citrus Growers Range by Yield 2009/2010 Season 56% of the area represents 77% of the total production 44% of the area represents 23% of the total production only boxes/ha Source: Markestrat
Citrus Trees and Production in São Paulo State 164,2 317,4 16,4 Source: IEA
Nurseries in São Paulo State Source: Fundecitrus
Acreage, Yield, Production Yield +41% Area -18% Prod +15% Source: AgraFNP - IEA
PRODUCTION ECONOMIC DISEASES
Brazilian Citrus Industry Chain - 2010 - Citrus Chain Revinew = US$ 6.5 Billions ( US$ 2,15 Bi External Mkt and US$ 4,39 Bi Domestic Mkt) Exports US$1,9 Bilhões (US$ 1,28 Bi in FCOJ+NFC ; US$ 0,7 Bi in by products) 1,0 % of all Brazilian Exports (US$ 197 Bi) 2.9 % of Brazilian AG Exports (US$ 60 Bi) 95% Shipping troughtout Santos Port 230 K employees US$ 819 millions on inputs ( US$ 288 M in pesticides only) Source: Markestrat
Harvesting Cost (R$/Bx) São Paulo Citrus Industry Source: Markestrat based on AgraFNP
Freight Cost (R$/Bx) São Paulo Citrus Industry Source: Markestrat based on AgraFNP
Diesel Oil Price (R$/Bx) São Paulo Citrus Industry Source: Markestrat based on AgraFNP
Amount of pesticides used in the Citrus Industry Source: Markestrat SINDAG
Oranges Production Cost in BRL and USD / box Orange - Cost of Production 12,00 10,00 8,00 6,00 4,00 2,00-10,02 9,87 9,58 8,24 5,01 7,73 3,93 5,64 1,73 3,28 5,21 2,23 1,49 4,36 1,58 1,70 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 R$/cx US$/cx Fonte: AgraFNP 2 Source: AgraFNP
Comparative Orange Production Cost SP and FL States (US$/bx) 2002/2003 2008/2009 FL Cost 3,3 times more than SP Harv & Transp FL Cost 1,9 times more than SP on tree Source: CitrusBR, CREC UF/IFAS
US$/box Grower Profitability Gross Margin (US$) US$/bx 7,0 6,0 5,0 4,0 3,0 2,0 1,0 0,0-1,0-2,0-3,0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Gross Margin Total cost Orange Price Fonte: AgraFNP, Cepea Source: AgraFNP, CEPEA
BRL/box - Deflat Grower Profitability Gross Margin (BRL) 20,0 15,0 10,0 5,0 0,0-5,0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010-10,0 Margem Bruta Custo Preço Laranja Indústria Fonte: ifnp, Cepea 2 Source: AgraFNP, CEPEA
US Dollar vs. Brazilian Real Exchange rate BRL/USD 3,40 3,20 3,00 2,80 2,60 2,40 2,20 2,00 1,80 3,08 Exchange Rate (R$/US$) Considering US$4.00/bx date US$/ R$ R$/bx July 2004 3,08 12,34 Sept 2008 1,65 6,59 Jan 2009 2,38 9,52 Jun 2009 2,26 9,04 Out 2010 1,67 6,68 1,65 1,60 Oct/10 1,40 jan/04 jul/04 jan/05 jul/05 jan/06 jul/06 jan/07 jul/07 jan/08 jul/08 jan/09 jul/09 jan/10 jul/10 Source: Banco Central do Brasil 25
Land Value (US$/Ha) São Paulo Citrus Belt and Florida Land Value (US$/HA) in Municipalities of the São Paulo Citrus Belt and Florida Municipalities 2001 2003 2005 2007 2009 Variation in the period Araraquara 2.352 2.699 4.936 9.919 9.126 288% Bauru 2.940 2.851 4.923 10.153 9.742 231% Campinas 4.621 4.595 7.312 10.534 10.140 119% Itapetininga 2.016 2.532 3.772 5.117 5.478 172% Piracicaba 3.781 3.424 4.971 10.328 10.393 175% Pirassununga 2.520 3.342 5.929 10.666 9.029 258% Ribeirão Preto 4.032 5.159 8.049 10.647 9.633 139% São J. do Rio Preto 2.352 3.147 5.869 8.831 9.247 293% Florida -South 15.827 14.647 24.583 39.810 29.842 89% Source: Markestrat based on AgraFNP and IFAS survey
Land Value (US$/Ha) São Paulo Citrus Belt Source: Markestrat based on AgraFNP
PRODUCTION ECONOMIC DISEASES
HLB Management Costs Inspection, Eradication and Psilid Control US$0,30 US$0,40/box HLB Management Source: GCONCI
Tree losses in SP due to the 4 major deseases Number of erradicated trees in the Citrus Belt due to the four major diseases (x.1000) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 TOTA L CItrusCanker 795 191 71 164 177 153 186 151 115 240 2.243 CVC 678 2.406 2.380 1.023 2.887 4.043 3.320 3.299 3.276 3.070 26.382 Greening - - - - - 5.330 5.330 SuddenDeath - - 5.158 - - - 5.158 Total 39.113 Citrus Canker CVC Sudden Death Greening Source: Markestrat CitrusBR, Fundecitrus
Citrus Canker % of Infected Blocks Source: Fundecitrus
HLB: % Contaminated Blocks In São Paulo State Source: Fundecitrus
HLB: Number of Contaminated Trees in São Paulo State Source: Fundecitrus
2008 Levantamento Amostral de Greening - 2008 Índices de Contaminação (Plantas) Sem contaminação >0% a 0.01% >0.01% a 0.1% >0.1% a 1% >1% a 2% >2%
2009 Levantamento Amostral de Greening - 2.009 Índices de Contaminação (Plantas) Sem contaminação >0% a 0,01% >0,01% a 0,1% >0,1% a 1% >1% a 2% >2%
2010 Levantamento Amostral de Greening - 2010 Processing Plants Índices de Contaminação (Plantas) Sem contaminação >0% a 0,01% >0,01% a 0,1% >0,1 % a 1% >1% a 2% >2%
HLB Sample Survey 38% of the blocks are contaminated Source: Fundecitrus
HLB incidence vs. Grove Size Source: Fundecitrus
São Paulo Citrus Belt Source: CATI
Citrus Production by SP Region
Citrus Belt Movement Trends Average Temperature Source: GCONCI
Ratio of Mid-Season Varieties in Sao Paulo State Source: AgraFNP
Potential Regions: free of HLB Good condition for Irrigated Citrus projects. Lack of infra-structure for Orange Juice Bahia, Tocantins, Goias: Greening Free States SP, Minas, Paraná States Greening found already Source: GCONCI
PRODUCTION ECONOMIC DISEASES OUTLOOK
São Paulo Citrus Industry Long Term Outlook Source: GCONCI
Gilberto Tozatti tozatti@gconci.com.br International Citrus Economics Conference Oct 2010, Florida - USA