American fuels and fertilizers gain space

Feb, 10, 2023 Posted by Lillian Smoak

Week 202307

The war in Ukraine and the energy crisis led Brazil to import record amounts of fertilizers, fuels and coal from the USA in 2022.

Last year, purchases from the US reached a record figure of US$ 51.3 billion, according to data compiled by the American Chamber of Commerce for Brazil (Amcham Brasil). The increase in average import prices, of 35.6% overall, is the main factor explaining the increase in imports, especially fertilizers, fuels and coal.

“This change [in the trade] of energizers has been happening since last year. There was growth in both directions [from US sales to Brazil and from Brazil to the US]. Part of this is the result of the shock of oil derivatives in Europe, the increase in international prices and also the fact that the US sanctioned oil imports, which opened up space for Brazilian sales”, says Abrão Arabe Neto, CEO of Amcham.

He claims that this year the tendency is for international prices to settle.

Among the top ten American products imported by Brazil in 2022 are oils and fuels, non-electric motors and machines, natural gas, crude oil, coal, fertilizers or chemical fertilizers, insecticides, fungicides and herbicides.

Fabrizio Panzini, superintendent of government relations at Amcham Brasil, says that the rise in American imports by Brazil, which took the balance deficit with the US to US$ 13.9 billion, is explained not only by the increase in prices in the foreign market but as well as higher demand.

“The quantity imported by Brazil has grown. It wasn’t just the price-effect,” he says. “There was also a very relevant increase in the price of goods related to energy, crude oil and fuel oils, mainly, but not exclusively. So, the product became more expensive.”

Panzini further argues that the war was one of the most important reasons for the price increase and also led to trade diversions that explain the movements in the Brazil-US trade balance over the last year. “Energy and fertilizers, fertilizers, fungicides, which were mostly purchased from Russia, had diversified suppliers to Brazil. And the United States turned out to be one of the main ones”, he concludes.

Source: Valor Econômico

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