In the year 2021, the trade balance recorded the largest surplus in its historical series, amounting to US＄ 61.2 billion. An increase of US＄ 10.8 billion compared to the 2020 balance. The trade flow (exports plus imports) reached a record value of US＄ 500 billion, as a result of a 34.2% increase in exports and a 38.2% increase. % on imports, between 2020/2021.
The increase in exports was led by the change in prices (29.3%), as the change in volume was 3.2%. In imports, the leadership was due to the volume that grew 21.9% while prices increased by 13.1%.
Commodity exports, with a 67.7% share of total exports, explain the performance of this trade flow. In terms of value, sales of commodities increased 37.3%, with the variation in prices of 38.9% accompanied by a decrease in volume of 1.8%. Non-commodity exports grew 28.1%, as a result of the 12.4% increase in prices and 13.5% in volume. The decline in the volume of commodities exported was small, more than offset by positive changes in commodity prices and non-commodity indices.
Commodity imports increased their share in the basket from 7% to 8.5%, between 2020 and 2021, associated with a 69.5% variation in value, between 2020/2021, with an increase in prices of 36.4% and in the volume of 23%. In the case of non-commodities, which accounted for 91.5% of Brazil’s foreign purchases, the change in value was 35.8%, with an increase in volume of 22% and in prices of 11.1%.
The rise in commodity prices in 2021 led to a 14.6% change in the terms of trade between 2020/2021, after a 0.1% drop between 2019/2020. A new wave of increase in commodity prices is not expected, but the year begins with a scenario of uncertainty regarding the effects of drought and rain on some crops, the slower pace of growth in China and the possible intensification of the use of subsidies in some countries, such as the United States in relation to the beef market.
Foreign trade by type of industry registered a 62.7% increase in value in mining and quarrying industry exports, explained by the 59.7% increase in prices and 1.3% in volume. The industry’s share of total exports increased from 23% to 28% between 2020 and 2021. It is observed that two products, iron ore and crude petroleum oil, explained 94% of the sector’s total foreign sales in 2021, and the two products registered variations, in value, of 73% and 55.3%, respectively. According to data from the Secretariat of Foreign Trade, changes in the average price US＄/ton were 65% for ore and 60.4% for oil, and for volume, 4.9% (ore) and a drop of 3.1% (oil). The share of the two commodities in total Brazilian exports was 26.8%.
The second largest change in value was in the manufacturing industry, at 26%, with a 51% share of total Brazilian exports in 2021, a drop of 4 percentage points compared to 2020. The price index increased by 17.8% and the volume 6.5% between 2020 and 2021. The industry’s export list is more diversified than that of agriculture and extractives, and the ten main products explained 46% of the sector’s foreign sales, being mostly products that can be classified as commodities. The product with the highest added value were passenger vehicles, among the top ten (10th main exported product, with a share of 2.3% in the industrial agenda). It should be noted that the main exported product was sugar and molasses (6.4% share of the industry’s foreign sales), followed by beef, soybean meal, fuel oil and poultry.
Agriculture, with a share of 20% in total Brazilian exports, recorded an increase of 23.6% in value, 27.2% in prices and a decrease of 1.8% in volume. Soybeans accounted for 70% of the sector’s sales and grew 35.3% in value, followed by coffee, with a 10.5% share and an increase of 16.7%. Repeating the behavior of commodities, the positive variation in value was led by prices: 30.3% (soybean) and 21.3% (coffee). The change in volume was 3.8% for soybeans and a decline of 3.8% for coffee.
The result of the behavior of foreign sales by industry is reflected in the composition of the main exported products. In descending order, iron ore, soybeans and crude oil explained 41% of total Brazilian exports in 2021, with 46% being the share of the top ten products. The other products on the top ten list of exports are commodities, such as meat, soybean meal, cellulose, iron and steel semi-manufactures and sugar.
On the import side, the agenda has a lower degree of concentration, with the ten main products accounting for 36% of foreign purchases and the three main ones (fertilizers, fuel oils and medicines), 16.7%.
The manufacturing industry accounted for 91.5% of imports and recorded an increase of 34.6% in value, 11.7% in prices and 20.3% in volume, between 2020/2021. The three main products imported from the industry are the same as the total basket: fertilizers, fuel oils and medicines account for 18.6% of the industry’s total foreign purchases.
The extractive industry participated with 6% of total imports. In terms of value, the sector’s purchases increased by 89.8%, with volume changing by 43.2% and prices by 31.6%. The main imported products were: liquefied natural gas; and petroleum crude oil. Together, the three products account for 88.5% of the sector’s total foreign purchases. The increase in value of 298% of gas imports is noteworthy, as a result of a variation of 108% in price and 91% in volume.
The weight of agriculture in total imports, in terms of percentage, was 2.5%, with positive changes of 30.7% (value), 22% (prices) and 7.2% (volume). The main imported product was wheat, with a share of 31% and growth of 24.3%. Then corn, with a variation of 261% and a share of 13.7%, and, in third place, fish, with a share of 11.4% and an increase of 66.8%. It is worth mentioning the increase in the average prices of wheat (23%) and corn (55%) which impacted food chains and put pressure on inflation.
There are no changes in the composition of the Brazilian agenda. The agriculture and extractive sectors recorded positive balances of U＄ 46.6 billion and 62.8 billion, respectively, and the manufacturing sector, a negative balance of US＄ 45.3 billion. A result that is repeated for agriculture, when analyzing the series of balances, since 2020. For the extractive industry, deficits in 2000, 2001 and 2004 and, in other years, the balances were positive. For the manufacturing industry, the balance was a surplus between 2002/07 and, in other years, a deficit. Dependence on primary commodities to generate surpluses makes foreign trade more subject to price fluctuations.
Finally, China remained the leader in Brazilian exports and imports. Its share of exports fell from 32.4% to 31.3% between 2020 and 2021, but exports increased by 29.4%. The price index increased by 38.8%, but volume declined by 6%. Imports grew 45.2% in value, with price increases of 9.9% and 22.5% in volume. The share in imports was 23.4%. Despite the greater increase in imports in relation to exports, in value, the surplus increased from US＄33 billion to US＄40.1 billion.
For the United States, the second largest partner, exports grew 45% and imports 41.3% in value. In the case of exports, the variation in prices was 24.4% and in volume, 20.4%. The trade deficit increased from US＄6.4 billion to US＄8.3 billion. For Argentina, the 2020 surplus of US＄591 million has turned into a deficit of US＄69.9 million. Exports grew 39% and imports, 57.7%. The exported volume increased 23% and the imported volume, 34.6%.
Asia confirms its leadership led by China in Brazilian foreign trade. The region’s share, excluding China, in the country’s exports was 15.1%, higher than the European Union’s, of 13%. In imports, the share was 12.2%, lower than that of the European Union, of 17.4%.(With information from FGV)