Brazil: Trade balance registers surplus of US$5.44 billion in July

The increased prices of various imported items, especially fertilizers and oil, shrink the trade balance surplus in July. Last month, the country exported US$5.44 billion more than it imported, a drop of 22.7% compared to the same month in 2012.

The trade balance accumulates a surplus of US$39.8 billion in the first seven months of the year. It represents 10.4% less than that recorded from January to July last year. Despite the decline, the balance is the second best in history for the period, second only to the first seven months of 2021, when the surplus had closed at US$44.4 billion.

Last month, Brazil sold US$30 billion abroad and bought US$24.5 billion. Both imports and exports set a record in July, since the beginning of the historical series, in 1989. Exports rose 20% compared to July last year, by the daily average criterion. Imports, however, increased at a greater pace: 31.6% in the same comparison.

However, the record imports and exports are due to the increase in the international prices of goods. Last month, the volume of exported goods rose only 4.7% on average compared to July last year, while prices increased 12.2%, favored by the appreciation of commodities (primary goods with an international quotation).

In imports, the quantity purchased rose 8.7%, but average prices rose 41.6%. The rise in prices was driven mainly by fertilizers, oil, coal, and wheat, items that became more expensive after the beginning of the war between Russia and Ukraine.

SECTORS

The increase in international prices weighed more heavily on agricultural and cattle-raising exports. The volume of goods shipped fell 2.6% in July compared to the same month in 2021, while the average price rose 38%. In the transformation industry, the quantity rose 8.3%, with the average price increasing 18.2%.

In the extraction industry, which includes mineral and oil exports, the quantity exported rose 4.8%, while the average prices dropped 13.9% compared to July last year. While the average price of crude oil rose 41.2% in this comparison, the price of iron ore fell 43.5%, driven by the lockdowns in China, which reduced international demand.

The most important products in agricultural and cattle-raising exports were unground corn (+201.7%), unroasted coffee (+84.4%), and soybeans (+23.8%). This growth is due mainly to prices. The negative highlight was cotton, whose exports fell 50.6% from July last year to July this year because of the anticipation of shipments at the beginning of the year.

In the extractive industry, the most significant growths were registered in the exports of crude mineral oils (+92.8%), crude oil (+77.5%), and nickel ore (+53.2%). In the transformation industry, the most significant growths were in fuels (+103.1%), sugars and molasses (+44.6%), and chilled or frozen beef (+27.4%).

Regarding imports, the largest growths were recorded in the following products: Unground barley (+83.5%), whole fish (+34.1%) and unground wheat and rye (+23.2%), in agriculture and livestock; non-agglomerated coal (+211.1%), natural gas (+106.5%) and crude oil (+98.5%), in the extractive industry; and fuels (+82.7%) and processed chemical fertilizers or fertilizers (+175.3%), fuels (+93.4%) and cathode valves (+58.5%), in the processing industry.

ESTIMATE

Last month, the government reduced to US$81.5 billion the trade surplus projection for 2022 because of the rising cost of oil and fertilizers. Despite the drop in the estimate, this figure would guarantee a record trade surplus for the country.

The official estimates are updated every three months. The forecasts are more optimistic than those of the financial market. The Focus bulletin, a survey of market analysts released every week by the Central Bank, projects a surplus of US$67.2 billion this year.

With information from Agência Brasil