Brazil will reach the historic export mark in 2023
We sell a lot more to other countries than we buy there. The result of this calculation, which represents the balance of Brazil’s trade balance until August 2023, was already higher than all of last year, exceeding $71 billion in the month of September, equivalent to R$361.5 billion.
Brazil has already experienced other moments of significant increase in the trade balance, for example in 2010. The difference is that over the last decade this increase has been linked to a fluctuation in the price of raw materials, which are products in the raw state such as oil and soy . They were more expensive back then; not now. The sales volume is higher. We produce and sell more.
Agriculture is the sector that has driven most of this growth. In 2010 it accounted for 11% of all products sold. Today a quarter of the products leaving the country come from agriculture. The share of manufacturing fell from 66.3% to 53.2%.
“There is one aspect that… One is the increase in productivity in the industry itself, which has grown significantly. For example, we are now a major exporter of corn, which we were not before, we have even overtaken the United States. And also the war in Ukraine. “Ukraine was a big grain supplier, as was Russia, and we occupied many of these areas, which contributed to this big increase in volume,” explains Lia Valls, economist at Ibre/FGV.
1 of 1 Brazil reaches the historic export mark in 2023 Photo: Jornal Nacional/ Reproduction Brazil reaches the historic export mark in 2023 Photo: Jornal Nacional/ Reproduction
At farmer Rodrigo Pavel’s farm in Dourados, Mato Grosso do Sul, growth went hand in hand with technology. He invested in better irrigation, machinery and seeds, increasing soybean and corn productivity by nearly 40% over the last 13 years.
“Demand is growing. Today, animal protein requires soy and corn to fatten fish, pork and chickens. So it’s growing,” he emphasizes.
Much of the corn and soy produced in Brazil goes to China, which remains our largest trading partner. In 2023, the Chinese bought 30% of everything Brazil sold. The USA takes second place, followed by Argentina.
China also buys a lot of oil, the most traded product in Brazil’s mining industry. The growth of oil exports also brings with it derivatives. Latin America’s largest lubricating oil factory sells to eight countries and recorded export growth of more than 10% in the first half of 2023 alone.
“We have grown at 17% per year over the last five years. And what we are seeing in this postpandemic period is a huge acceleration in the markets in which we operate. We are investing more than R$100 million in the factory to expand capacity.” So there is a lot of room for growth that is still untapped; “We are investing a lot to develop this market,” says Saulo Brazil, director of Vibra lubricants.
But economists warn: It is necessary to strengthen the industry in order to diversify export products. Today, almost half of our sales outside the country are raw products.
“This is Brazil’s biggest challenge. We will not be able to raise wages and create quality jobs without capturing space in this market of medium and high technology industries. We have some exceptions, splendid exceptions, but we need a much, much larger volume of companies able to export, conquer the global market and expand the production of hightechnology industrial products,” argues Paulo Gala, chief economist at Banco Master.