Brazil’s agricultural exports to neighbor Venezuela are picking up

Brazilian agricultural producers are once again exporting food to Venezuela, even though the government of Jair Bolsonaro is very restrained in his dealings with his neighbor.

Official data from the Ministry of Economy shows that exports have picked up after a sharp decline in Brazilian sales in the Venezuelan market since last year.

The volume was still a fraction of Brazil’s exports in 2012 when the flow exceeded the US$5 billion mark. At that time, the Venezuelan market was the eighth largest destination for national sales, and the decline in exports in 2019 represented a 23-year setback.

The deep crisis in the country, the lack of credit guarantees, the sanctions imposed by Donald Trump’s administration and Jair Bolsonaro’s decision not to recognize Nicolas Maduro’s government caused values to plummet.

In 2016, Brazil exported US$1.6 billion. However, in 2019, the first year of the current Brazilian president’s term, the volume dropped to just US$420 million.

From 2021, the flow gained a new rhythm. Last year, Brazil again exported more than US$1 billion to the Venezuelan market. In 2022, this amount is expected to be far exceeded.

By June, the country had already exported more than US$713 million. Sales of Brazilian soybean oil rose from just US$29 million at the start of Bolsonaro’s administration to US$189 million last year. By July, more than US$120 million had already been sold. The increase is due to food and agricultural products.d.

Food preparations rose from US$4 million to US$75 million in the same period, while meat sausage went from a non-existent export to US$54 million.

One of the cases that best illustrates the return of trade with Maduro is sugar trade. Sales reached US$120 million before the Bolsonaro government. However, they fell to only US$19 million. In just seven months, they now total US$48 million.

Impressive jumps were also recorded in trade in corn, margarine and even Brazilian cookies.

Imports of Venezuelan products into Brazil have also increased significantly. However, they are far below Brazilian sales. In 2016, Venezuelans exported US$415 million to the Brazilian market.

That volume dropped to just US$80 million in the first year of Bolsonaro’s administration. But in July, it is already at 176 million U.S. dollars and could return to 2016 levels.
Diplomatic break and end of economic collapse.

The new high in Brazilian sales comes after years of great reserve by Bolsonaro against Maduro. Brasilia no longer recognized his government and withdrew diplomats from Caracas. The United Nations have already been accused of setting up a veritable system of repression against the opposition.

Knowing the real data on the Venezuelan economy is a challenge for international institutionsMaduro’s government did not release much information in 2019 when the economy plunged by 24%.

This year, in a speech to Congress, he indicated that the country would grow by 4% in 2021 and that the rate of expansion in the first quarter was 7%. Today, given the war in Ukraine, Venezuelan oil is again accepted by Western powers.

If confirmed, 2021 would be the first year in eight years in which the local economy expands. However, according to some international estimates, the country has lost 75% of its GDP during that period.

Credit Suisse, for example, estimates that the Venezuelan economy could grow by 4.5% in 2022, largely due to oil revenues. Hyperinflation is also showing signs of slowing. After reaching 3,000% per year, it would have been 686% in 2021.