Soybeans 16% of Brazil’s exports in first half-year

Soybeans account for 16% of the total amount of Brazil’s exports to the world for the first six months of the year. Adding iron ore and oil, the percentage reaches 33%. The figures were released today by the Brazilian Institute of Economics of the Getúlio Vargas Foundation (Ibre FGV), and refer to June.

China’s space on Brazil’s export agenda is still growing, and the Asian country is still the main destination of Brazilian goods, having surpassed that of the 28 countries in the European Union. Brazilian exports to China surged 26% in the first half-year.

As Brazilian exports have focused on few commodities, and China has stood out as a major destination for Brazilian goods, “a new agenda for the country’s foreign trade policy must be discussed,” the study says.

Depreciated foreign exchange

The economists with FGV note that the June figures show that the effects of the depreciated foreign exchange is yet to make an impact on trade flow, particularly on imports. The effects are not immediate, the study adds, and there are other factors at play. As for imports, for instance, domestic activity is the chief factor, and up to may the GDP was expected to grow 2.5% to 2.8%.

“Bringing these forecasts [for the GDP] to values near one percent after the first six months of the year implies that, in addition to the delayed effect on foreign exchange, imports are likely to face a stronger slowdown” starting in the second half-year, the institute claims.

The document further argues that, for exports, “the effect was a 9.7% increase in non-commodities compared to the first two half-years, and 7.9% from June 2017 and [June] 2018.”

Commodities, which account for 60% of Brazilian exports, went up 2.9% in the first six months this year from the same period last year, even though it slid 1.7% May to June.