For the second consecutive month, Brazil’s balance of trade hit a new record. In July, the country exported $8.06 billion more than it imported, as per data released by the Economy Ministry on Monday (Aug. 3).
This is the largest surplus for the month since the beginning of this time series, in 1989. Altogether, exports added up to $19.56 billion in July, whereas the total of products and services imported stood at $11.50 billion.
The main drivers behind the result were the performance of agricultural goods—boosted by a higher demand from Asian countries and a depreciated real—and the generalized decline in imports as a result of the economic crisis brought about by the COVID-19 pandemic.
Year-to-date (January through July), Brazilian exports were 6.4 percent lower than the same period in 2019. As for imports, the plunge in the first seven months was even sharper—10.5 percent. The government estimates that Brazilian exports fall more than ten percent in 2020 and imports are slashed by 17 percent.
“We have to bear in mind that we’re going through a crisis. At such moments, it’s normal that imports should fall and you get a surplus you can export, making the balance of trade reach an interesting balance,” said Lucas Ferraz, secretary for Foreign Trade with the Economy Ministry.
The government’s goal, he argued, is not posting a surplus in the balance of trade, but rather increase both imports and exports in a balanced way.
“Crucial for the country is a balance of trade where exports and imports grow in a balanced manner. In the long run, our objective is still increasing the current of trade—imports and exports—via an expanded international insertion of the Brazilian economy. There’s no great exporter who isn’t also a great importer,” he added.
Despite the plunge in exported values, due to the depreciation of real against the dollar, the volume of products sold by the country in July this year grew compared to the same time span last year, especially in the agricultural sector, where the increase reached 21.1 percent.
What is believed to have driven this performance is soybean sales, whose value was up 35.2 percent in the first seven months of the year, against the same period last year. The exported volume was even higher: 38.2 percent. The demand has chiefly come from Asian countries, like China, which saw a 15.4 percent expansion in the purchase of Brazilian goods in the first seven months of the year compared to the same period in 2019.
Among the goods imported by Brazil, the main reduction was observed in fuels and lubricants. The decline was 32.9 percent comparing January–July 2020 and 2019, due to the lower domestic demand amid the economic crisis prompted by the pandemic.