Brazilian trade balance accumulates USD 2.837 bln in February

The drop in coffee, beef, and oil exports made the Brazilian trade balance surplus backtrack a little in February. Last month, the country exported US$ 2.837 billion more than it imported, a decrease of 35.3% from February of last year when the balance was in surplus of US$ 4.629 billion. Despite the drop, this is the third-best result for the month, trailing only February 2022 and 2017.

The trade balance has accumulated a surplus of US$ 5.446 billion in the year’s first two months. Based on the daily average, this is 19.2% more than recorded in the same months last year. The accumulated balance is the second highest since the start of the historical series in 1989. In the first two months of 2017, it only loses to a surplus of US$ 6.722 billion.

Last month, Brazil sold US$ 20.56 billion abroad and bought US$ 17.723 billion. Exports – measured daily –  fell 7.7% compared to February 2022, but the value is the second best for the month, second only to last year. Imports fell 0.9% on the daily average and reached the third-highest monthly value in history, second only to February 2022 and 2014.

In the case of exports, the reduction is primarily due to decreased volumes shipped rather than the depreciation of international prices. Last month, the volume of exported commodities fell, on average, by 12.3%, while average prices dropped 0.8%.

The quantity purchased as imports fell by 6.3%, which reflects the slowing economy, but average prices rose by 1.2%. The price increase was primarily driven by chemical compounds and medicines, which became more expensive following the outbreak of the war between Russia and Ukraine. Chemical fertilizer prices fell 19.7% from February 2022 to February 2023 after rising sharply the previous year.

Market sectors

The delay in shipments outweighed the appreciation of commodities in the agricultural sector. The average price advanced 8.4% in February compared to the same month in 2022, while the volume of goods shipped fell 13.1%. In the manufacturing industry, the quantity exported dropped by 5.4%, with the average price increasing by 4.2%.

In the extractive industry, which encompasses the export of ores and oil, the quantity exported fell by 29.4%, and average prices plunged by 17.3% over February last year.

Crude oil once again spearheaded the drop in exports, with volumes retreating 58.8% and prices falling 22%. After a year of continuous highs, oil prices are falling because the effects of the war in Ukraine and the economic recovery after the most acute phase of the covid-19 pandemic have already been incorporated into quotations.

Compared to February last year, the products that pushed down the average of exports the most were raw cotton (73.1%), unroasted coffee (44.3%), and soy (3%) in agriculture.

In the extractive industry, the most significant drops were registered in exports of stone, sand, and gravel (68.4%), crude petroleum oils or oils from bituminous minerals (67.9%), and nickel ores and concentrates (100%). In the processing industry, the biggest declines occurred in rolled steel (57.6%) and beef (27%), owing to the suspension of exports to China after the discovery of a case of mad cow disease in Pará and sugar and molasses (19.2%).

Imports fell the most in wheat and rye (21.6%), horticultural products (24.7%), and latex (41.4%) in agriculture; other base metal ores and concentrates (16.1%), coal (31.2%), and natural gas (85%), in the extractive industry; and fertilizers or chemical fertilizers (39.2%), boilers (98.1%), and thermionic valves and tubes (26.1%) in the transformation industry.

Estimates

Unlike usual, the Foreign Trade Secretariat did not release an estimate for the trade balance this year. Traditionally, projections are released in the first month of each quarter. However, the Focus bulletin, a study of the market analysts released weekly by the Central Bank, projects a surplus of US$ 57.35 billion this year.

Source: Agência Brasil

To read the original news report, visit: https://agenciabrasil.ebc.com.br/economia/noticia/2023-03/balanca-comercial-tem-superavit-de-us-2837-bi-em-fevereiro

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