The enactment of 50% U.S. tariffs on several Brazilian products, including fresh produce, is raising concerns about increased competition in Brazil's domestic fruit and vegetable market. Analysts note that the measure could lead to lower consumer prices and reduced producer margins.
According to Valeska Ciré, representative of the International Fresh Produce Association (IFPA) in Brazil, the sector is "observing, with the expectation of dialogue." She explained that even if exporters seek new markets, reallocating containers originally destined for the U.S. is complex, and producers' margins are likely to be reduced immediately. "Increased supply could lead to more competition and falling prices, and will penalize producers," she said during The Brazil Conference & Expo held on August 6–7 in São Paulo.
IFPA has 3,000 members globally and 160 companies in Brazil, ranging from small to large, including producers of mangoes, grapes, melons, strawberries, and apples. Ciré noted that all will be impacted by the tariff changes.
Of the US$1.3 billion exported by Agrícola Famosa in 2024, the U.S. accounted for about 12%, or roughly US$140 million. The company's main market is Europe, which absorbs 70% of production. Even so, the impacts of the tariff increase are a concern, said founding partner Luiz Roberto Barcelos. "It's a significant volume; the price will inevitably fall."
Barcelos said that U.S. importers are accepting lower margins while passing part of the cost increase on to consumers. Some Brazilian exporters, he added, are also prepared to reduce their own margins. However, higher prices in the U.S. are expected to slow consumption and increase imports from other suppliers, such as Ecuador and Peru. If the tariffs remain, domestic production is likely to decline. "The ones who will pay the price are the Brazilian producers, the importers, and the North American consumers," Barcelos said.
He described opening new markets as a long-term process. "It took us seven years to ship melons to China, and four years to ship grapes. It's possible to open new markets, but any of them won't take less than two years. This solution will have zero effect on the mangoes that are already on the tree waiting to be harvested today."
Ciré also called for campaigns to boost domestic consumption, noting that Brazil currently consumes only one-third of the amount of fruit and vegetables recommended by the World Health Organization. "Greater domestic demand would create a large domestic market, absorbing the increased supply," she said.
Source: Abrafrutas