Find out why 2021 is being a record year for exports for Brazil
September 27, 2021
Brazil Breaks Export Records
The Ministry of Economy and Special Secretary for Foreign Trade and International Affairs (SECINT) presented in July a report on the Brazilian trade balance for the last 7 months, which shows a historic record in exports, with an increase of 35.3% in products exported by Brazil compared to the same period last year.
This way, Brazil can celebrate a Surplus of US$ 44.13 billion.
"We have never exported as much in the first seven months of the year, in value terms, as we have this year 2021," said the Ministry of Economy's Under-Secretary for Foreign Trade Intelligence and Statistics, Herlon Brandão.
José Augusto Castro, president of AEB, said that this occurred due to the increase in ore prices, a strong increase in soybean prices and the recovery in oil prices.
The three products that lead Brazilian exports had an increase of up to 45% in relation to the dollar exchange rate. This happens, mainly, because these same products are indispensable commodities for foreign trade.
What favours Brazil as one of the largest exporters in the world would be its favourable tropical climate for agriculture, which benefits the possibility of having two harvests per year (which does not occur in other countries) and also the agility of the harvest due to technological advances.
The demand for fuels and iron ore has also grown considerably. China is now Brazil's largest trading partner, being the largest importer of soy and iron ore, accounting for almost 34% of all exports.
The United States and Argentina also appear on the list of destinations that are expanding their exports and trade agreements with Brazil.
Therefore, the country's trade balance had a surplus and Brazilian exports may remain at this level until 2023, according to Insper.
The Trade Balance represents the difference in value between exports and imports of goods (but not services) and is an important driver of the foreign exchange market. Trade balance data are usually released by Central Banks or Ministries of Finance and are one of the components of the Balance of Payments.
The trade balance may be positive (surplus), when the value of exports exceeds that of imports, or negative (deficit), when the value of imports exceeds that of exports.
It follows that a surplus indicates monetary capital inflows, while a deficit indicates capital outflows. The correlation between capital flows and the foreign exchange market soon becomes evident: to pay for imports, you need the currency of the country you are importing from. Therefore, the more a country's exports grow, the more its demand for currency increases.
brasil, comércio exterior, comex, exportação