SAO PAULO: In February, the trade deficit from early this year has compounded further. According to data released by the Brazilian Ministry of Development, Industry and Foreign Trade, in Brasília, imports overcame exports by US$ 2.842 billion last month. In January, the deficit had been US$ 3.174 billion. A year earlier, in February 2014, a US$ 2.821 billion deficit was posted. Year-to-date in 2015, Brazil’s trade deficit is US$ 6.016 billion. In the comparable period of 2014, a US$ 6.196 billion deficit was posted.
In February, US$ 12.092 billion worth of products were shipped out from Brazil, averaging at US$ 671.8 million a day. The daily average is down 15.7% from February 2014. Imports reached US$ 14.934 billion, averaging US$ 829.7 million a day, and down 8.1% from February of last year.
According to the chairman of the Brazilian Foreign Trade Association (AEB), José Augusto de Castro, the industry was expecting a trade deficit in January and February. Still, last month’s performance was worse than imagined because the truck drivers’ strike affected product delivery at ports and, therefore, shipping. In the first week of the month, exports averaged US$ 735.6 million the first week. In the last week of the month, the daily average was US$ 616.8 million. Truckers stopped working and blockaded roads across the country to protest against rising work-related costs.
“Usually, exports are expected to start picking up after Carnival, but that was not the case. They have actually dropped,” said Castro. Now, products that weren’t shipped in the final week of February will tend to be loaded onto ships in early March. “In theory, this will cause monthly exports to rise. But only in theory, because some letter of credit deadlines may not be extended,” he remarked.
The industry expects the trade balance to start rebounding in March, when large amounts of grain crop products are shipped, especially soy. Such products are expected to drive up sales at least until July.
Late last year, the AEB issued a US$ 8.1 billion trade surplus forecast for Brazil at the end of 2015. The projection still stands and will only be revised in July, but Castro says products’ prices are already moving away from forecast ranges. “We didn’t figure coffee and iron ore prices would plummet the way they have. Meats still underpin exports (in revenues), but they have also dropped,” said Castro.
In February, exports to all destinations slowed down but to the United States, with sales up 8.9% from February 2014 to US$ 1.791 billion. Exports to the Middle East were down 6.6% year-on-year in February to US$ 665 million. Year-to-date, however, United States and Middle East are the only two destinations to which exports increased. Brazilian sales were up 2.4% to US$ 3.766 billion for the US, and up 2.8% to US$ 1.511 billion for the Middle East.
Castro attributes higher sales to Arab countries to an eventual “fortuitous” sale or deal. In turn, the United States is the “big hope” for the industry this year. In February, the Brazilian Development minister Armando Monteiro Neto travelled to the US.
Concerning imports, fuels and lubricants purchases from abroad were down 20.3% year-on-year in February. Imports were down 8% for capital goods, 6.8% for consumer goods and 3% for raw materials and intermediate goods. Brazil’s imports from Middle East countries were down 15.7% due to lower purchases of fuel oils, aircraft parts, insecticides, crude oil, sulphur, and plastic sheets.
