Imports grow and reduce trade balance in June by 33%

The Brazilian trade balance had a surplus of $6.711 billion in June, according to the Foreign Trade Secretariat (Secex) of the Ministry of Development, Industry, Commerce, and Services (Mdic). This result was 33.4% lower than the same period last year, primarily due to increased imports.

Exports totaled $29.043 billion in June, a decrease of 1.9%. Imports reached $22.332 billion, an increase of 14.4%. Year-to-date, the surplus stands at $42.309 billion, a decline of 5.2%. Exports have totaled $167.608 billion, a 1.4% increase, while imports have reached $125.298 billion, a 3.9% increase. The trade flow of exports and imports reached $292.907 billion, a 2.5% increase.

A 2.2% decline in prices caused the 1.9% drop in Brazilian export value in June, although the volume shipped grew by 2%, according to Herlon Brandão, director of Statistics and Foreign Trade Studies at Mdic. He noted a 50% drop in exports to Argentina, mainly due to a 5.1% decline in Argentina’s GDP in the first quarter.

Import growth was driven by capital and consumer goods. In volume, the entry of goods and services increased by 22.3% compared to the same month last year. This growth rate is more than ten times that of exports, which increased by 2% in quantity.

Lucas Barbosa, an economist at AZ Quest, analyzes that the rise in imports reflects strong economic activity in the first months of this year and supports upward revisions to investment projections for 2024.

He notes that average prices fell in June for imports and exports, resulting in a 14.4% increase in import value and a 1.9% drop in export revenue compared to June 2023.

Barbosa anticipates that with exports remaining stable and imports accelerating, trade balances will likely reduce in the coming months, considering the accumulated results over 12 months. His estimate for 2024 is a surplus of around $85 billion.

In imports, the economist highlights the pace of capital goods, whose volume grew by 17.4%, and consumer goods, with an increase of 11.3%, compared to the same month in 2023. The increase in investments partly reflects the period when the Selic rate was on a downward trajectory and supports the revisions of investment projections for 2024.

On the export side, Barbosa observes a more ambiguous message, with a drop in prices in June for critical commodities like soybeans but “resilience” in volumes, which increased not only for soybeans but also for oil and items like coffee and sugar, which have become increasingly significant in the export list.

Secex has revised upward its projection for the trade balance surplus this year from $73.5 billion to $79.2 billion. Estimates for exports (from $332.6 billion to $345.4 billion) and imports (from $259.1 billion to $266.2 billion) were also revised upward. The projection for the trade flow, the sum of exports and imports, increased from $591.7 billion to $611.6 billion.

Brazilian exports to China, Hong Kong, and Macau, the top destinations for Brazilian products, grew by 4.65% in June, based on the daily average, compared to the same month the previous year. Total sales to Asia rose by 1.73%.

In a similar comparison, sales to North America fell by 4.24%, while sales to South America dropped by 33.31% and to Europe increased by 4.99%.

Agricultural exports fell by 3.71% in June compared to the same month the previous year. The extractive industry saw an increase of 15.26%, while the manufacturing industry experienced a decline of 6.76%. On the import side, there was a 50.69% increase in agricultural purchases, a 4.56% drop in the extractive industry, and a 15.24% increase in the manufacturing industry.

Source: Valor Econômico

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