Foreign trade: less dynamism in flows

The trade balance for the first two months of 2023 was US$ 5.1 billion, an increase in the balance of US$ 500 million compared to the same period of the previous year. But the variation in trade flows pointed to a slowdown in the comparison between the results between 2021 and 2022.

Economist at the Catholic University of Brasília, Cássia Chagas explains that this is a discouraging scenario for Brazil and for other countries as well.

“The scenario is not favorable for foreign trade. The volume of exports and imports has decreased – which is not good, neither for Brazil nor for other countries. The reduction in international demand is a bad point for the Brazilian economy, as the country loses space in the international market, for example. The increase in product prices also contributed to this situation”, emphasizes the economist.

Between the first two months of 2021 and 2022, the export value grew by 36.1% and the imported value by 30.3%. In the first two months of 2022 and 2023, the export value increased by 0.2% and the imported value decreased by 1.2%. For exports, prices increased by 3.1% but volume decreased by 2.9%.

Imports and exports

On the side of imports, the 5.8% drop in volume was greater than the 4.8% increase in price, which explains the drop in imported value. Commodity exports accounted for 64% of total exports and recorded a 6.5% drop in volume, comparing the first two months of 2022 and 2023.

The export volume of non-commodities also decreased, but in a smaller percentage, 1.6%, and the price variation of this group surpassed that of goods. The results of the import indices show an increase in imported basic products, a decrease in other basic products and an increase in prices in the groups.

However, the increase in the prices of imported raw materials was greater than that of other raw materials. The oil and derivatives group stands out, which make up the basket of exported and imported raw materials.

The group participated with 14.9% and 13.8% of Brazilian imports, respectively, during the first two months of 2023. The group’s balance fell from 2.5 billion dollars to 1.2 billion dollars, between the two first two months of 2022 and 2023. In imports, the participation of agriculture was 2.3%, with an increase of 17%, in value, driven by price variation, of 13.3%, and an increase of 1.1%.

It is observed that the main imported product registered a drop in value compared to the first months, but all the other four main products had increases between 22.1% and 126%. Cocoa is a particular case, as there were no imports in 2022.

The participation of the extractive industry in exports was 20.5%, with a drop of 14.2%, in the comparison of the first two months of 2022 and 2023. Both the volume exported and the prices of exports retreated.

The main export product, crude oil, which represents 49% of the sector’s sales, recorded a drop in value of 28.6%. The second main, iron ore, increased by 2.5%. Extractive industry imports fell 33% in value, down 30.9% in value and 2.2% in price.

Asia was the main export destination with a share of 39.2% in the first months of 2023. China’s share was 23.4% between the first two months of 2022 and 2023, Brazilian sales fell by 4.9 %.

The decline in value was driven by a 4.4% decline in volumes, with prices down just 0.7%. Among the five main commodities exported to China, pulp appreciated.

The three main products, which account for 65% of Brazilian sales to China, recorded declines: crude oil, soy and iron ore. The results still do not show the possible effects of the end of the country’s containment policy.

For the United States, with a share of 11.7%, the increase in value was 8.7%, in price 8.1% and in price 0.4%. Of the top five exports, only gross sales declined in value.

Some of the main products recorded increases of over 50%, such as cellulose, pig iron and civil engineering facilities and equipment.

For Argentina, the volume increased 3.9% in value 18.6%. It should be noted that among the five main exports, such as auto parts and automobiles, there were increases of 42.6% and 41.4% respectively.

In addition, with the drought that plagues Argentina, soybean occupies the third place as the product that most goes from Brazil to Argentina. For the European Union, there was an increase in volume and there were drops in exports “Other South America” and “Other Asia”.