Trade balance has surplus of US$ 10.592 billion in June

The trade balance – difference between exports and imports – closed June with a surplus of US$ 10.592 billion, disclosed this Monday (3) by the Ministry of Development, Industry, Commerce and Services (MDIC). The result is the best for the month of June and represents an increase of 19.1% compared to the same month last year, based on the daily average.

With the June result, the trade balance ended the first semester with an accumulated surplus of US$ 45.514 billion, a record result for the period since the beginning of the historical series, in 1989.

Regarding the monthly result, the record occurred despite both exports and imports falling in June. Last month, Brazil sold US$ 30.094 billion abroad, down 8.1% compared to the same month in 2022 based on the daily average. Purchases from abroad totaled US$ 19.502 billion, down 18.2% using the same criteria.

On the side of exports, the drop in commodities (primary goods with international quotation) was the main factor responsible for the decline. After breaking a record in the first half of last year, after the start of the war between Russia and Ukraine, commodities have retreated in recent months, causing a decline in foreign sales. The record soybean harvest contributed to holding back the drop in exports.

Last month, the volume of exported goods rose only 6.7%, while prices fell 15.2% on average compared to the same month last year. In imports, the quantity purchased fell by 3.3%, but average prices fell by 17.7%.

Sectors

When comparing the agricultural sector, the record harvest of grain weighed more on exports. The volume of goods shipped rose 30.4% in June compared to the same month in 2022, while the average price fell 18.2%. In the manufacturing industry, the quantity fell 5.7%, with the average price retreating 7.1%. In the extractive industry, which encompasses the export of ores and oil, the volume exported rose 12%, while average prices fell 28.3%.

The most prominent products in agricultural exports were unground corn (-13.5%), unroasted coffee (-26.2%) and raw cotton (-28.3%). Except in the case of coffee, affected by the smaller harvest, this decrease is mainly due to prices. The positive highlight was soybeans, whose exports rose 10.1% from June last year to June this year due to the record harvest, even though the average price fell by 20.7%.

In mining and quarrying, the biggest falls were registered in iron ore and concentrates (22.8%) and crude petroleum oils or crude oils from bituminous minerals (25%). In both cases, the quantity exported rose, but average prices fell with the accommodation of international quotations after the first anniversary of the war between Russia and Ukraine.

In the manufacturing industry, the biggest falls occurred in fuels (47.9%), industrialized vegetable fats and oils (49%) and industrialized iron (36%).

Regarding imports, the biggest decreases were registered in wheat and rye, unground (58.8%), unground corn (92.5%) and latex, natural rubber and natural gums (63.9%), in agriculture ; non-agglomerated coal (56.8%), crude oil (46.8%) and natural gas (29.6%), in the extractive industry; and fuels (21.7%), organo-inorganic compounds (26%) and fertilizers or chemical fertilizers (66.1%) in the manufacturing industry.

Regarding fertilizers, whose purchases from abroad are still impacted by the war between Russia and Ukraine, the drop is mainly due to the 55.2% decrease in prices. The imported quantity dropped 24.3% in May compared to June last year.

I estimated

Despite the devaluation of commodities, the government slightly revised upwards the trade surplus projection. For 2023, the government foresees a surplus of US$ 84.7 billion, against previous projection of US$ 84.1 billion.

According to the MDIC, exports will decrease by 1.4% in 2023 and will end the year at US$ 330 billion. Estimates are updated every three months. Imports will drop 10% and close the year at US$ 245.2 billion.

Forecasts are much more optimistic than those of the financial market. The Focus bulletin, a survey of market analysts released every week by the Central Bank, projects a surplus of US$ 63.76 billion this year.