Brazil records 25% hike in agricultural exports volume

In the face of declining export prices, a surge in the volume of agricultural and extractive industry exports has proven pivotal in maintaining a positive trajectory for Brazil’s trade balance, as revealed in the latest bulletin from the Foreign Trade Indicator (Icomex) by the Brazilian Institute of Economics at the Getulio Vargas Foundation (FGV Ibre).

For the year-to-date period from January to November, the quantity of agricultural products shipped witnessed a remarkable 25% increase compared to the same months in 2022. Simultaneously, the extractive industry saw a notable uptick of 18.8% in volume. November’s trade surplus stood at $8.8 billion, culminating in an overall surplus of $89.5 billion for the year up to November. Regardless of the December outcome, the bulletin underscores that the value has already reached the pinnacle, marking the highest surplus in the annual historical series of the trade balance.

In both agricultural and extractive industry exports, the heightened quantity effectively counteracted the impact of the average decline in export prices, registering decreases of 10.8% and 13.3%, respectively. The fusion of volume and price resulted in a 10.7% upswing in the value exported by the agricultural sector and a 2.6% increase in the extractive industry, all within the context of the year-to-November total. Correspondingly, concerning Brazil’s overall sales, export revenue exhibited a 1% growth, propelled by an 8.7% surge in quantity and a 7% reduction in average prices.

The trajectory of imports also played a pivotal role in shaping the 2023 surplus. The total value of purchases contracted by 11.8% from January to November this year compared to the analogous period in 2022. Import volumes diminished by 2.4%, and average prices experienced a 9.5% decline.

Moreover, contrary to gloomy expectations in trade relations with key partners, Brazil bolstered its surplus with China and Argentina and narrowed the deficit with the United States.

The Sino-Brazilian trade balance skyrocketed from $27.2 billion to $46.8 billion from January to November 2022, the same period this year. During this timeframe, the surplus with Argentina surged from $2.3 billion to $4.8 billion, while the deficit with the United States dwindled from $13.6 billion to $1.6 billion. China contributed 52.3% to Brazil’s $89.5 billion surplus in the year-to-November trade balance.

However, the manufacturing industry faced adversity, continuing its trend of diminishing participation in total exports, dropping from 55.6% to 53.1% from January to November 2022 to the corresponding period in 2023. External sales from this sector dwindled in both volume and price. From January to November, the value exported by the manufacturing industry contracted by 3.6%, with a 1.3% decline in volume and a 2.3% reduction in prices, according to Icomex.

Source: Valor Econômico

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