South America becomes outlet for Brazilian exports

After growing back to pre-pandemic levels in 2021, Brazilian exports to South America advanced this year faster than the total average of exports, also outpacing the growth rate of imports, in opposition to what happens in the country’s total balance. As a result, the trade surplus between Brazil and its neighboring countries reached US$ 7.97 billion from January to July this year, more than double the US$ 3.68 billion in the same period in 2021. However, the country’s total balance dropped 10% over the same period.

As a consequence, the surplus with South American countries accounts for 20% of the total from January to July this year, up from 8.3% in the same months last year, according to statistics from the Department of Foreign Trade (Secex/ME). Brazilian exports to the region hit US$ 24.85 billion this year, a 39.4% rise. Total shipments in the country increased by 20.1%. The difference was also seen in the growth in imports, which increased by 19.4% in trade with neighbors and 31.6% in total international purchases from January to July.

Brazilian exports to South Americans fell in 2020 with the outbreak of the covid-19 pandemic. That year, from January to July, the country exported US$ 12.02 billion to neighboring countries, a value 27.2% below the US$ 16.5 billion in 2019. In 2021, with the economic recovery in the region, exports until July totaled US$ 17.82 billion. The performance of shipments this year contributed to a surplus slightly above the US$ 7.92 billion of the same months of 2018, before the peak of the record series that started in 1997, considering the period of the first seven months of the year.

See below the volume of Brazilian shipments, in TEUS, to South American Countries

Brazilian exports in containers to South America | Jan 2021 – Jun 2022 | TEUS

Source: DataLiner (click here to request a demo)

For José Augusto de Castro, president of the Brazilian Foreign Trade Association (AEB), the recovery of foreign sales to the South American market is important because the region is traditionally a consumer of Brazilian manufactured products. However, oil exports to countries like Chile have also helped to increase shipments and the trade surplus in regional trade. A third of the US$ 5.18 billion that Chileans absorbed from January to July in Brazilian products was oil, followed by automobiles, which had a share of 7%. As for Brazilian imports of South American products, says Castro, commodities or products with little processing predominate.

Secex data show that four of the five main items shipped to neighbors from January to July were manufactured, all linked to automotive or transport. Oil topped the list, with a share of 9.4%, practically tied with 9.03% in cars. The two items were followed by car parts and accessories, goods transport vehicles, and tractors. The five products accounted for 28% of Brazil’s exports to South America.

Source: Valor Econômico

To read the full original article, please go to: https://valor.globo.com/brasil/noticia/2022/08/15/paises-vizinhos-viram-valvula-de-escape-para-exportacoes.ghtml

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