Dairy sector in Brazil dips into largest trade deficit in 22 years

The dairy industry in Brazil dipped into its biggest trade deficit since January 2000 in August. The difference between spending on imports and the revenue gained from exports reached USD 93 million, a value 76.3% higher than the one registered in July, as released last week by the Center for Advanced Studies in Applied Economics (Cepea) based on government data. In volume, the deficit was about 170 million liters (milk equivalent) — almost six times more than in July.

Imports of dairy products rose for the fifth straight month in August, when the country bought 177 million liters of milk-equivalent products. The volume exceeds that of July by 64%. In terms of value, the expenditure totaled US$ 99.7 million — 65% more than in the previous month.

Powdered milk represented 74.3% of imports, with 131.5 million liters (milk equivalent) in purchases. Brazil’s leading suppliers were Uruguay and Argentina, which represented 92% of the total purchased at an average price of US$ 4.24 per kilo, 3.2% higher than the average negotiated in July.

Exports

Exports from the dairy sector dropped 11.7% in volume month-on-month and totaled 7.2 million liters shipped mainly to Israel and the United States. Sales reached US$ 6.8 million in revenue, down 9% compared to July.

See below the track record of both exports and imports of dairy products (including NCM codes HS 0400 to HS 0405) from and to Brazil between January 2021 and July 2022. The data is from DataLiner.

Dairy Exports and Imports | Jan 2021 – Jul 2022 | TEUs

Source: DataLiner (click here to request a demo)

Cheese sales were the most relevant, reaching 2.5 million liters in milk equivalent, or 35% of the country’s total exports. The average price negotiated was US$ 11.79 per kilo, up 6% compared to July.

This scenario results from a drop in production in Brazil.

Source: Valor Econômico

To read the full original article, please go to: https://valor.globo.com/agronegocios/noticia/2022/09/26/balanca-de-lacteos-registra-maior-deficit-em-22-anos.ghtml

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