Debts in the agribusiness sector increase by 73% in 202

The debt levels of Brazilian agro-sector companies have increased, with 207 rural producers filing for judicial recovery in the first half of 2024, surpassing 2023 figures. Adverse weather conditions, high interest rates, and rising costs have contributed to this situation. From January to September 2024, 1,700 companies filed for judicial recovery in Brazil, a 73% increase compared to the previous year.

The primary sector, including agribusiness, has seen a significant rise in judicial recovery requests, with 287 cases from January to September 2024—more than three times the 77 cases recorded in 2023. Companies like AgroGalaxy, with debts of R$ 3.7 billion, exemplify this trend. Other notable cases include Grupo Patense (R$ 2.15 billion), Sperafico Agroindustrial (R$ 1.07 billion), and Usina Maringá (R$ 1.02 billion), all facing large debts with financial institutions and suppliers.

"High interest rates are one of the main factors driving the increase in cases, along with consumer default, currency depreciation, and the challenge of keeping up with technological transformations. The drop in fertilizer prices, for example, was smaller than the drop in grain commodity prices. On top of that, weather conditions haven’t helped. All of this has harmed the sector," comments Eduardo Bazani.

In 2024, seven out of ten judicial recovery requests in Brazil are made by micro and small companies. Eduardo Bazani emphasizes that corporate restructuring is essential to help these businesses overcome financial difficulties and regain their financial and operational health.

Reference: https://www.agrolink.com.br/noticias/endividamento-no-agro-cresce-73--em-2024_497028.html