Brazil breaks all-time monthly records for exports and trade balance surplus in April

RIO DE JANEIRO, BRAZIL – April marked a record season for Brazilian foreign trade, starting with the US$10.35 billion surplus – the highest absolute figure compared to any month of any year – driven by a 67.9% growth compared to April 2020.

The highest monthly surplus so far had been recorded in July last year, at US$7.6 billion, covering the full period of official records that began in 1997. Exports also hit a record, up 50.5%, totaling US$26.48 billion. In this case, the previous highest value was registered in August 2011, at US$20.08 billion.

Imports

Imports for the month reached US$16.13 billion, up 41.1%, the 5th highest value for the month of April. Thus, the trade flow rose 46.8%, reaching US$42.61 billion in the period, which also represents a record, but only for the month of April. The data were released on Monday, May 3rd, by the Ministry of Economy’s Foreign Trade Secretariat (SECEX).

Year-to-date

From January to April 2021, compared to the same period in 2020, the surplus amounts to US$18.26 billion, an increase of 106.4%. The trade flow reached US$146 billion, registering an increase of 20.7%. Exports grew 26.6% to US$82.13 billion, while imports rose 14% to US$63.87 billion.

Four-month period

According to SECEX, four-month exports were also the highest on record for the first 4 months of the year. The trade balance was the second highest, behind only the 2017 surplus of US$19 billion, while the trade flow was the third highest for the period.

High quantities and prices

The growth in exports in April occurred in all categories, with the most significant increase in the extractive industry, reaching US$6.46 billion (+73.2%). In agriculture and livestock, sales reached US$8.23 billion (+44.4%) and in manufacturing the mark reached US$11.66 billion (+43.9%).

Factors

Undersecretary of Foreign Trade Intelligence and Statistics Herlon Brandão explained that this increase in foreign sales is due both to the rise in prices and in exported volumes. “Until March, the main factor that explained the increase in exports was the price. With the increase in quantities, this good result was achieved, with a record export value of more than US$26 billion in the year,” he commented.

Agriculture and Livestock

The Agriculture and Livestock sector stood out, with a 35.8% growth in quantity compared to April 2020, particularly in soybean sales. Exports of the oilseed rose 17% and reached a record 17.4 million tons, allowing a result that was also helped by the 22.3% increase in price in the month. “We have a recovery in global demand, rising prices for important products in Brazil’s export portfolio, in addition to the concentration of soybean exports. We had a late harvest this year, which caused exports to increase more in March and April, to the detriment of February and January. Nevertheless, we have a record harvest and a heated world demand, which made this product stand out,” said Brandão.

Extractive Industry

In the Extractive Industry, there was a 70.7% increase in prices. “Iron ore alone posted growth of 92%, when comparing the price of April this year with April of last year. The export price of this product reached US$126 a ton, very close to historical highs in 2011, when it reached US$136 a ton,” recalled the undersecretary.

High imports

SECEX also verified an increase in imports in all sectors. The Manufacturing Industry – which represents 90% of purchases – posted an increase of 42.6%. In quantities, this segment recorded a 30% increase in purchases, driven by components and intermediate goods.

Attention

Pointing out the graph of imports by daily average, Herlon Brandão drew attention to the fact that the Covid-19 pandemic and the economy slowdown in 2020 produced “a mid-year low,” while in 2021 there is a more sustained trajectory, with an average around US$800 million per working day, in all months of the year. “We should see high import growths, for comparison base effect, throughout the year,” he predicted.

Destinations and origins

When it comes to destinations, sales to China increased by 55.1%, but Brandão pointed out that the increase was registered for all Asia, such as Japan, which bought 36% more from Brazil last month. For the Association of Southeast Asian Nations (ASEAN) countries, the increase reached 53%, and for Korea, 43.6%.

Increase

In April, Brazil also sold more to Argentina (+88.2%), totaling US$900 million, while to the United States (+33.7%) there were US$2.32 billion and to the European Union (+37%) sales totaled US$3.45 billion. “These are significant growths for all regions, but with different characteristics,” said Brandão.

Asia

For Asia, the increase is over a high base of 2020, with a great impact of price. On the other hand, for destinations such as Argentina, the United States and the European Union, the comparison base of April 2020 is low, considering the impacts of the novel coronavirus pandemic on purchases from these countries last year.

Forecasts

Herlon Brandão recalled that in January SECEX disclosed a “more modest” forecast – of 5% in the exports growth for the year – due to a scenario of uncertainty in relation to the pandemic effects, vaccination rate and consumers’ behavior. With the results of the first 3 months, the projection was revised to US$266.6 billion in exports for the year, which would be an annual record.

Expectation

“This last projected result showed a growth of 27%. The growth in the four-month period, so far, is 26.6%. So, this first quarter projection anticipated this good result from April. As surprising as we may find it, it is within what has been projected so far and, for now, there is no reason to believe that this expectation will change,” he stated.

Context

According to the undersecretary, the same is true for imports and trade balance forecasts: “When we released this projection, the expectation was for a balance of almost US$90 billion. So, the impressive balance of April, of US$10 billion, is also within this context”, concluded Herlon Brandão.

Source: Paraná Cooperativo