BRASILIA: Brazil’s trade balance in July was $2.4 billion, roughly in line with market expectations of $2.3 billion.
The result was lower than the surplus of $4.5 billion in June 2015, but higher than the $1.6 billion surplus in July 2014.
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With the improvements in the trade balance since March, the 12-month trade balance improved to a surplus of $1.6 billion in the month.
Exports reached $18.5 billion in July, down -19.5% year-on-year.
Soybean shipments remained very strong, despite the benign seasonality. The concentration of soybean exports in the last three months suggests there will be strong decline in the volume exported in the coming months, representing an important drag on the trade balance in the remainder of the year.
There was a decline in the daily average of exports of crude oil, of -61.5% yoy, and of iron ore of -37.5% yoy in June, following the sharp reduction in the prices of these commodities in the international market (export prices of crude oil and iron ore declined -46.4% yoy and -42.7% yoy, respectively). Exports of beef and coffee beans also contracted substantially in July, by -27.1% yoy and -22.2% yoy, respectively.
Brazil also reported a decrease in exports of raw sugar, which saw a contraction in export prices of ‑22.6% yoy, and of hides and furs, of -25.8% yoy and -26.1% yoy, respectively.
There was a large decline in exports of fuel oils and refined sugar of -42.7% yoy and -31.7% yoy, respectively. The increase in the daily average of exports of aircraft and passenger vehicles partially covered a greater decline in exports of manufactured goods.
Manufactured goods exports were lower compared to June and July 2015, as the impact of BRL depreciation on this group has lagged.
The dynamics of imports were very similar to those of the previous month, with a widespread decline in all sectors.
The decline in imports closely tracks the contraction in domestic demand, with the imports of capital goods, intermediate products, and durable goods posting a strong decline compared with July 2014.
Imports totaled $16.1 billion in July, down from $15.1 billion in June (down -24.7% yoy). The decline in imports of passenger vehicles and fuels and lubricants of -22.6% yoy and -60.9% yoy, respectively, in July was the most pronounced.
The significant BRL depreciation in recent quarters has contributed to the sharp year-on-year drop in imports in the past few months.
The biggest falls in July were the declines of -27.1% yoy in imports from Argentina and of -31.8% yoy in imports from the USA.
