The year 2020 started unfavorably for Brazilian foreign trade. In other words, the volume of Brazilian exports fell by 19.3% in February this year compared to January 2019.
The volume of imports grew by 2.0% in the period. The data comes from the Foreign Trade Indicator (Icomex), released this Thursday, 20th, by Fundação Getulio Vargas (FGV).
The January trade balance recorded 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 results of a single month.
However, new developments in February signal a reduction in the trade balance deficit for 2020, assessed 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 Brazil's foreign trade performance is the coronavirus epidemic in China, which has reduced growth projections for the Chinese economy.
The coronavirus, together 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, FGV highlighted.
The Icomex team predicts a possible drop between 10% and 15% in Brazilian exports to China this year. At the same time, FGV considers it unlikely that the Argentine economy will be able to 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 products.
The construction of a climate of understanding between the two countries, with the visit of the Argentine Minister of Foreign Affairs to Brazil.
However, leading to the possibility of suspending licensing measures for imports, it is an important step”, highlighted the FGV note.
In January 2020, Brazil's trade with China recorded a deficit of US$ 1,566 million, driven by a drop of 8.8% in the value of exports, explained by a decline of 2.5% in volume and 6.4% in prices.
In the case of imports, however, the change in volume was positive (3.4%), but prices fell by 3.8%.
Trade with the United States was also in deficit, at US$ 847 million, with a drop of 28.8% in the value of exports, due to a decline of 23.2% in volume and 7.3% in prices.
In the imports, a positive change in value was recorded (+8.7%), with advances in volume (+8.4%) and prices (+0.4%).
Trade with Argentina had a small surplus worth US$ 17.8 million in January. Exports fell 0.9% in value, with drops of 0.2% in volume and 0.7% in prices.
Imports fell by 17% in value, with reductions in both volume (-13.6%) and prices (-3.7%).
