Evolution of the profit margin for yerba mate in Rio Grande do Sul

Yerba mate is a product deeply rooted in the culture, history, and tradition of significant segments of the Brazilian population, especially in the Southern region. From the 1990s onwards, the sector underwent changes, such as deregulation and increased external competition. In this context, this study aimed to investigate the evolution of the commercialization margin of yerba mate in the Rio Grande do Sul market, a major producer and the main national consumer, from January 1998 to December 2016. The behavior of production, consumption, and foreign trade was also investigated. The results indicated an increase in cultivated production, reflecting deregulation, while foreign trade had marginal importance in total sales, both before and after deregulation. The results also indicated substantial stability in the margin, and prices were only significantly altered by a supply shock in 2013. Because it is a permanent crop, whose supply is inelastic to prices, it may take time to return to the previous level. Finally, the importance of diversifying consumption and organizing sectoral information as tools for developing the sector and the local economies linked to it is highlighted.