The year 2020 began unfavorably for Brazilian foreign trade. In other words, the volume of Brazilian exports decreased by 19.3% in February this year compared to January 2019.
The volume of imports grew by 2.0% in the period. The data are from the Foreign Trade Indicator (Icomex), released this Thursday, 20, by the Getulio Vargas Foundation (FGV).
The January trade balance registered a deficit of US$ 1.7 billion, after consecutive surpluses in this same month since 2016.
It is premature to make projections based on the result of a single month.
However, new events in February signal a reduction in the trade balance deficit for 2020, assessed the FGV, in an official note.
Risks in Exports
Icomex recalls that the agreement between China and the United States should lead to losses in soybean exports, but there is also a risk for meat exports.
Another risk to the performance of Brazil's foreign trade is the coronavirus epidemic in China, which has reduced growth projections for the Chinese economy.
The coronavirus, along with the effects of the agreement between China and the United States, points to a drop in commodity prices for the coming months, and a decline in the volume imported by China.
Estimates of losses for Brazilian exports are uncertain, as it is not yet known how long it will take for control of the coronavirus epidemic to be guaranteed, said the FGV.
The Icomex team predicts a possible drop of between 10% and 15% in Brazilian exports to China this year. At the same time, FGV considers it unlikely that the Argentine economy will contribute to the increase in Brazilian exports in 2020.
Negative Effects
The Argentine effect is not new, but the fact is that it will continue to affect exports of Brazilian manufactured goods.
Building a climate of understanding between the two countries, with the visit of the Minister of Foreign Affairs of Argentina to Brazil.
However, leading to the possibility of suspending import license measures, it is an important step”, emphasized the FGV note.
In the month of January 2020, Brazil's trade with China recorded a deficit of US$ 1,566 million, driven by a drop of 8.8% in export value, explained by a decrease of 2.5% in volume and 6.4% in prices.
In the case of imports, however, the variation in volume was positive (3.4%), but prices fell by 3.8%.
Trade with the United States was also deficient, at US$ 847 million, with a drop of 28.8% in export value, due to a decrease of 23.2% in volume and 7.3% in prices.
In the imports, there was a positive variation in value (+8.7%), with advances in volume (+8.4%) and prices (+0.4%).
Trade with Argentina had a small surplus of US$ 17.8 million in January. Exports dropped by 0.9% in value, with declines of 0.2% in volume and 0.7% in prices.
Imports retreated 17% in value, with reductions in both volume (-13.6%) and prices (-3.7%).
