São Paulo – The Brazilian balance of trade had its best first-half performance of the last three years in 2015. According to data released this Wednesday (1st) by the Ministry of Development, Industry and Foreign Trade, exports were higher than imports by US$ 2.222 billion. In the first half of last year, there was a US$ 2.512 billion deficit. The last first-half trade surplus had been recorded in 2012, according to government news outlet Agência Brasil.
A partner at consulting firm Barral MJorge and former Foreign Trade secretary, Welber Barral told ANBA that the trade balance closed the six-month period on a surplus because imports saw a sharper decline than imports. “This is not so good, because it also shows that imports of capital goods (such as machinery and equipment) went down, as did industry inputs imports. This could or could not stimulate demand for domestic inputs,” he said.
According to the ministry, Brazil exported US$ 773.2 million worth of goods per day in the first six months this year, down 14.7% from the daily average in the first six months of last year. Exports grossed US$ 94.329 billion during the six-month period.
Imports averaged US$ 755 million, down 18.5% from US$ 926.6 million a day from January to June 2014. Total imports reached US$ 92.107 billion in the first half this year. One of the products whose imports dropped the most was oil. From January through June of last year, Brazil imported US$ 7.08 billion worth of oil. In the comparable period of this year, oil imports reached US$ 3.13 billion, down 55.8%. “This came due to the decline in oil prices, but also as a consequence of weaker demand for the product,” he asserted.
Middle East steps up imports
Exports declined across all three product categories in the first six months this year. Basic goods exports fetched US$ 44.04 billion, down 21.6% from the first half of 2014. Semi-finished goods exports reached US$ 12.789 billion, down 3.9%. Finished goods exports were down 8% to US$ 35.047 billion.
Basic goods whose exports dropped the most were iron ore, down 49%, beef, down 23.5%, and soybean, down 22.5%. In finished goods, oils and fuels exports were down 63.4%, motors and generators were down 25.8% and land leveling machinery exports were down 23%. As for semi-finished goods, foreign sales were down 15% for leathers and hides, 13.9% for raw sugar, and 12.4% for crude soy oil.
All markets imported less from Brazil, barring the Middle East. Sales to countries in the region were up 2.3% from January through June, driven by soybean, aluminum oxides and hydroxides, soy bran, semi-finished gold, land leveling machinery, rice, crude soy oil, wheat, wood pulp and tractors.
Imports declined over the board
Out of the products Brazil imports the most, fuels and lubricants imports were down 36%, capital goods imports were down 15.8%, raw materials and intermediate goods imports were down 15.1%, and consumer goods imports were down 13.7%. All supplying countries exported less to Brazil. Sales from the Middle East to the country were down 37.5%, driven by lower imports (in product values) of oil, kerosene, urea, potassium chloride, fuel oils, and fertilizers, among other items.
In June alone, Brazil exported US$ 19.628 billion worth of products, down 8.7% from June 2014 based on average daily figures. Average daily imports stood at US$ 15.101 billion last month, down 20.6% from June 2014. There was a US$ 4.527 billion trade surplus in June. June had 21 business days this year, and 20 in 2014.
Barral said finished goods exporters are yet to profit from the high US dollar, which in theory should fuel sales. This should only be the case in 2016, he says. Commodities, on the other hand, depend on international prices, and the consultant claims no relevant hikes in prices of these products are in sight.
*Translated by Gabriel Pomerancblum
