Agribusiness surplus grows faster than Brazilian economy

The trade surplus of the Brazilian agribusiness sector reached USD 53 billion from January to September this year, exceeding the USD 47.7 billion surpluses of the Brazilian trade balance in 2021.

The extractive industry also added to the overall economic surplus, but on a smaller scale: US$ 32.6 billion, while the manufacturing industry saw a deficit of US$ 36.9 billion.

These numbers are part of the Icomex bulletin published on the morning of Oct 18t by the Brazilian Institute of Economics of the Getulio Vargas Foundation (FGV Ibre).

The 2022 trade surplus reflects a shift in the country’s trade balance composition between the agricultural and extractive industries compared to last year.

While agriculture’s positive balance increased by 36% compared to the surplus from January to September 2021, the extractive industry decreased by 37% in the same period.

With the rise in the price of iron ore at a record level during the last year, the balance of the extractive industry reached US$ 51.5 billion in the same nine months of last year, reveals the bulletin.

Prices also helped the agricultural sector in 2022. According to Icomex data, prices and exports of products in the industry increased by 37.5% on average in 2022 compared to the previous year, from January to September.

The rise in prices offset the 2% drop in export volume compared to the same period.

Because of the adjustment in the price of iron ore, the average export price dropped by 1.8%, and the quantity shipped also decreased by 6.7%.

As for the manufacturing industry, the three sectors with the largest surpluses are all natural recourse-intensive, with positive balances accumulating year on year.

These sectors are food products (US$ 38.6 billion), metallurgy (US$ 22.5 billion), and pulp, paper, and paper products manufacturing (US$ 7.4 billion).

The increase in import prices exceeded that of exports, but the fall in the volume of imports and the increase in exports ensured the increase in the trade surplus.

In addition to these three sectors, six more market segments recorded surpluses and, except textiles, all increased their balances, but with values below US$ 1 billion. The bulletin analyzed a total of 23 sectors.

The biggest deficits within the manufacturing industry were in the chemical products (US$ 42.9 billion), IT equipment (US$ 20.5 billion), and machinery and equipment manufacturing (10.8 billion) sectors.

Except for chemical products, variations in the price indices of exports exceeded those of imports, and the volume imported was greater than that exported, according to the FGV Ibre bulletin.

Source: Valor Econômico

To read the full original article, please go to: https://valor.globo.com/brasil/noticia/2022/10/19/superavit-do-agro-supera-o-da-balanca.ghtml

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