North Latin America
Strong Results Despite Unprecedented Challenges
In 2021, Brazil experienced the worst drought in over 90 years. This led to damaged crops, rising energy and commodities prices, and significant market volatility. In this context, and despite the ongoing challenges presented by Covid-19, we kept our assets in full operation, delivering a robust performance and serving business partners in the country and abroad.
Cotton Market Share Growth
After a record year in 2020, Brazilian cotton production fell by some 23% in 2021. Nevertheless, we increased our activity in the domestic market, strengthening relationships with producers and selling to more mills, while pushing forward with our export programs. This meant we grew our market share by 5% and fell just shy of 2020 volumes.
Successful Coffee Operations
Continued supply chain disruptions due to Covid-19, weather events and logistic bottlenecks made efficient operational management key. Despite a 40% decrease in production and significant price increases for Arabica, we achieved a small total balance increase. With Robusta, we strengthened our position as one of the market leaders in domestic sales and led origination activity in all producing regions in Brazil.
Murilo Parada
Head of North Latin America
“In another year of pandemic-related challenges, we kept our teams safe and secured food and fiber distribution to both domestic and external markets, while delivering good results and strong risk management.”
More Regional Highlights
We completed our first-ever rail shipment carrying exclusively cotton lint from Mato Grosso State to the Port of Santos, São Paulo State – an innovative move that reduced our transport costs and carbon footprint.
We continued to focus on evolving our coffee business model, reducing dependency on spot farmer selling decisions and increasing deferred procurement. We also invested a considerable amount in coffee asset improvements, expanding intake capacity at Varginha warehouse, Minas Gerais State, and revamping two processing lines at Matipó warehouse, also in Minas Gerais.
Although record dry weather drove sugarcane crop production down by almost 15% compared to 2020, profitability continued to rise in both our sugar and ethanol businesses. To counter the high price of sugar, we expanded our foreign exchange pricing facility to mills, which supported increased profitability of our origination business.
Ethanol saw a record trading year in the region, largely thanks to successful derivatives positioning, and, on the physical side, we grew our domestic origination business. We also entered the final stage of regulatory authorization to trade domestic ethanol through our micro-distillery project.
We began trading biofuel Decarbonization Credits (CBIOs). We anticipate this activity will grow, as we continue to deepen our knowledge of the low-carbon economy – both globally and in Brazil.
With another record soybean crop in Brazil, up 8% compared to 2020, we maximized processing and logistic asset efficiencies, securing market share gains in both origination and export flows.
Despite a challenging year for both fertilizers and chemicals, marked by sudden price increases and product shortages, we achieved record volumetric and financial results, and completed the integration of our Macrofértil fertilizer entity in Brazil as part of LDC Brasil S.A., to better serve clients across our business platforms.
104
containers transported by rail to Santos, São Paulo State, on the first train loaded exclusively with Brazilian cotton lint
x2
number of robots operating in our Shared Service Centre, driving efficiency, speed and accuracy gains
↑5%
growth in Brazilian cotton market share
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