Giuliana Napolitano
São Paulo – The trade balance ended 2003 showing records: record export of US$ 73.1 billion and the largest surplus ever registered by the country, US$ 24.8 billion. Import, however, rose little more than 2% and reached a total of just US$ 48.2 billion. This year, though, the situation may be inverted, estimate experts. The federal government and analysts expect foreign purchases to rise as much as 20%, while export should rise little over 10%, in the most optimist projections.
The main reasons for this change in scenery are the expected economic growth, and the rise of the real against the dollar. "In 2003, we only had the dollar dropping against the real, and this factor, alone, is not enough to increase import, a fact clearly seen," stated economic analyst Nelson Carneiro, from consultancy Global Invest to ANBA.
Last year, the Brazilian real rose 18% against the dollar – which ended the month of December at R$ 2.88, after having started the year at R$ 3.52. But expansion of the Brazilian Gross Domestic Product (GDP) should not be greater than 0.5%, according to the government – making import rise little. For 2004, the government and analysts estimate average economic growth of 4%. One dollar should cost around R$ 3.00.
Exchange rates are of great influence to product prices on the foreign market; economic performance determines demand; growth means a greater market not only for imported, but also for exported goods. "With the economic growth expected for this year, import should rise and companies in the country should focus on the domestic market," stated Carneiro. "Demand should rise, and it is easier to sell to a known customer," he added.
According to the specialist, estimates show a possible 16% rise in import. "Economic statistics show that, generally, foreign purchases have a percentile growth four times larger than the percentile GDP growth," he explained.
The government goes further. Last week, the Development Ministry foreign trade secretary, Ivan Ramalho, stated that import may rise as much as 20% this year, to around US$ 58 billion. If confirmed, this volume would be the largest since 1997, when the real was at its highest value, and the country purchased US$ 59.7 billion internationally. From then on, business dropped and reached their lowest level in 2002, at US$ 47.2 billion.
Capital goods and fertilizers
To Carneiro, the sectors that should be responsible for import increases this year are capital goods (machinery and equipment), raw material and fuel. "The increase in economic activity should increase the demand for these products," evaluates the economist.
In some segments, there had already been growth in 2003. Agricultural expansion, for example, increased the purchase of fertilizers. Apart from this, to transport the record harvest (estimated at 122 million tons of grain), it was necessary to increase fuel import. The Global Invest analyst recalled that most Brazilian cargo transport is done on highways, "increasing the demand for fuel."
With this, total import rose 15% between September and December, when compared to the same period last year. On the other hand, as industrial growth was small, the purchase of goods dropped by 10.7%. Trading of consumer goods also dropped by 6.2%. This last area, incidentally, should continue dropping in the first half of this year, believes Carneiro. "This is due to the fact that the purchase of these products depends on income, which continues low and takes longer to recover," he declared.
Export: differences
Regarding export, expectations vary. The Development Ministry expects sales to rise around 10% and reach US$ 80 billion this year. Banks and consultancy companies spoken to by the Central Bank, however, estimate a more modest result, US$ 76 billion. And Global Invest forecasts a drop of almost 3% in the total exported by Brazil, to US$ 71 billion.
Nelson Carneiro says this estimated drop is due to the forecasted increase in internal demand, whereas the government is betting on the vigor of the new markets reached by the country. Sales to countries that until recently had small participation in Brazilian export have been surprising. Shipping to China, for example, rose 80% last year in comparison to 2002, and reached US$ 4.5 billion, placing the country in the third position amongst the largest buyers of Brazilian products.
In the same way, export to the Middle East and to Africa rose around 20%, to US$ 2.8 billion and US$ 2.9 billion, respectively.
According to Global Invest itself, between January and October (the most recent figures available), Brazilian foreign sales rose US$ 11 billion. Of this total, only US$ 800 million came from the largest buyers of Brazilian products. "The rest came from new markets," pointed out Carneiro.
Among these alternative market the economist pointed out the Arab countries. "It is a region with great potential as it imports consumer goods of almost all kinds. Apart from this, oil revenues finance the purchase of foreign goods," he ended.
