Trade balance has the highest monthly surplus in the historical series

Benefiting from the soybean harvest and exports of oil and iron ore, the trade balance registered, in May, the highest surplus for every month since the beginning of the historical series, in 1989. According to the Ministry of Development, Industry, Commerce and Services (MDIC), the country exported US$ 11.378 billion more than it imported in May.

The value represents more than double the positive balance in May last year, which totaled US$ 4.958 billion. Last month, exports totaled US$ 33.067 billion, also the highest value for every month since 1989. The increase reached 11.6% in relation to May of last year based on the daily average.

The balance was also boosted by the drop in imports. In May, the country bought US$ 21.689 billion, a decline of 12.1% also based on the daily average criterion in the same comparison.

With the May result, the trade balance accumulates a surplus of US$ 35.285 billion in the first five months of 2023. The result is the highest in the historical series for the period and 39.1% higher than that of the same months last year, also by the criterion of the daily average.

In the case of exports, the increase is due more to the increase in traded volume than to the international prices of goods. Last month, the volume of exported goods rose by an average of 29.3% compared to May last year, while average prices dropped by 13.7%.

In imports, the quantity purchased rose only 0.3%, reflecting the economic slowdown, but average prices fell by 13.1%. The drop in prices was driven mainly by fuel and fertilizers, items that became more expensive after the start of the war between Russia and Ukraine, but are returning to normal prices. Chemical fertilizer prices, which rose sharply last year, fell by 47.6% between May 2022 and 2023.

Sectors

All three sectors evaluated showed growth in exports in relation to May last year. Agricultural sector exports increased by 15.7%. Mining and quarrying industry sales grew by 12.8%, and those by the manufacturing industry increased by 8.5%.

In the agricultural sector, the beginning of the soy harvest weighed more on the rise in exports, despite the drop in several commodities (primary goods with international quotation). The average price dropped 14% in May compared to the same month in 2022, while the volume of goods shipped rose 34.3%. In the manufacturing industry, the quantity exported rose 16.6%, with the average price falling 6.5%.

In the extractive industry, which encompasses the export of ores and oil, the quantity exported rose 51.9%, but average prices dropped 26.1% in relation to May last year.

Crude oil once again drove the increase in extractive industry exports, with the volume exported rising 75.7%, despite the 30.9% drop in prices between May 2022 and May 2023. Petrobras platforms that were undergoing maintenance. After a year of continuous highs, oil prices are falling because the effects of the war in Ukraine and the economic recovery after the most acute phase of the covid-19 pandemic have already been incorporated into quotations.

I estimated

In April, the economic team released the second estimate of the trade surplus for 2023. The government projects a positive balance of US$ 84 billion for this year, which would represent an increase of 36.8% in relation to the record surplus of US$ 62.3 billion recorded in 2022.

Official estimates are updated every three months. Forecasts are 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$ 60 billion this year.