Brazil’s chemicals trade sets new record deficit of US$18.6 billion in first semester 2021
RIO DE JANEIRO, BRAZIL – The strong increase in chemical imports, in both dollar value and volume, in the first half of the year resulted in a new negative record in the Brazilian trade balance.
According to preliminary data from the Brazilian Chemical Industry Association (Abiquim), the accumulated trade deficit reached US$18.6 billion, the highest ever for the first six months of the year and 32.7% above the negative balance registered in the same period in 2020.
In the 12 months through June, the chemical trade deficit jumped 32.7%, to US$34.8 billion, indicating that the negative balance in 2021 is on track to be the largest in history, despite the challenges imposed by the Covid-19 pandemic.
According to Abiquim, Brazilian imports of chemicals totaled US$25 billion in the first half of the year, up 27.8% year-on-year. They were US$3 billion higher than in the first half of 2013 when the sector’s previous largest negative balance was recorded (US$32 billion). The monthly imported value was above US$3.5 billion in all the months of 2021, reaching the unprecedented mark of US$5 billion in June.
Exports, on the other hand, rose 15.6% in the first semester to US$6.4 billion, supported mainly by the increase in the average price of chemicals in the international market, which was reflected in a 9.8% increase in the sales prices of Brazilian goods.
In volume, while imports grew 15.9% in the semester to 26.5 million tons, exports rose 5.2% to 8.1 million tons. Both reached a new record.
In a note, the executive-president of Abiquim, Ciro Marino, classifies the results of the first semester as “encouraging” but “seriously alarming”.
On the one hand, points out the executive, the balance of trade data confirm the expectations of resumption in trade. On the other hand, they highlight the “enormous challenges in the competitiveness agenda to transform the sector’s investment potential into projects to be implemented in the short and medium-term.”
“Undoubtedly, the domestic market is a strategic asset for Brazil and only by accelerating structural reforms, strengthening competitiveness and a robust and effective trade defense system to combat predatory and unfair practices will we be able to maximize the use of the industrial park already installed and attract new productive investments, bringing more jobs and income to Brazil in this new economic moment in which the post-pandemic world is already beginning to take shape,” said Marino to Valor.
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