Leonardo

Leonardo from XP Investimentos sought clarification on the impact of the moratorium's end on land conversion and land prices, questioning if it presents an opportunity or risk. He also asked about the short-term outlook for farmer profitability and financial health, and whether increased land liquidity and attractive pricing might emerge from distressed assets.

Answer

André Guillaumon, CEO, clarified that the end of the moratorium would likely lead to a more rational approach to land conversion rather than a 'crazy race,' as opening new areas remains challenging. He noted that land prices are already dropping, with judicial recovery processes affecting liquidity. While banks are recovering smaller properties, the high cost of capital still makes returns unattractive even with reduced land prices. He indicated that lower interest rates and a positive scenario would make BrasilAgro more active buyers.

Leonardo followed up on land conversion dynamics, specifically how the end of the Moratorium might impact short-to-mid-term feasibility and land prices. He also asked if the current challenging profitability for farmers, after several years of declining soy prices, could lead to increased land market liquidity and more attractive pricing.

Answer

André Guillaumon, CEO of BrasilAgro, stated that the end of the Moratorium would likely lead to a more rational approach to land opening, not a 'crazy race,' as most new areas come from individual farmers. He confirmed that land prices are dropping, citing examples of properties now available at lower sack-of-soy valuations. However, judicial recovery processes are limiting market liquidity, and high capital costs still make returns unattractive, even with reduced land prices. BrasilAgro would be more inclined to buy if interest rates were lower.