Brazil starting to feel the effect of coronavirus stoppages

Brazilian industry is starting to feel the effects of missing Chinese components. The coronavirus outbreak and the ensuing stoppage of many ports and industries in China has led to postponed shipments. China is Brazil’s largest trading partner, and is responsible for 20% of all Brazilian imports.

A survey conducted by Abinee (Brazilian Association of the Electrical and Electronic Industry) shows that 52% of all manufacturers in the electric and electronic sector that were interviewed are already having difficulties in receiving materials and components from China.

This was observed mainly among manufacturers of Information Technology products (cell phones, computers, among others). The survey was carried out on February 5, and interviewed about 50 companies from different segments within the electric and electronic sector.

According to the survey, if the situation persists, 22% of companies surveyed indicated they would need to stop production of the final goods in the coming weeks. The lack of input components and materials from China makes it hard to continue to manufacture goods in the electronics sector.

Even those participants who have not yet been affected cited that if the supply of components from China does not return to normal within the next 20 days, it will be difficult to maintain the same pace of production in the coming months.

“We are very concerned with the impact this will have the sector’s production and we continue to assess the situation closely,” said the executive president of Abinee, Humberto Barbato.

A survey by Datamar shows that four maritime services are on the China-Brazil route. A total of 48 ships that access Brazilian ports bring imports from China.

According to Datamar’s calculations, the impact on Brazilian exports and imports for each ship that fails to make the China-Brazil route is about 5,000 TEUs and 3,000 containers. The average travel time is 35 days.

It is worth remembering that China is the main source of imports of components for Brazil, totaling US$ 7.5 billion in 2019, which represents 42% of the total. It is also noteworthy that other countries in Asia were responsible for 38% of imports of electrical and electronic components in 2019. Therefore, Asia represented 80% of Brazilian imports of electrical and electronic components.

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