Commodity devaluation leads to decline in trade surplus for August

The devaluation of several commodities (primary goods with an international price) and the rise in imports due to economic recovery led to a sharp decline in Brazil's trade surplus (exports minus imports) in August.

In the month, Brazil exported $29.08 billion and imported $24.25 billion, resulting in a surplus of $4.828 billion. This represents a 49.9 percent decrease from the surplus for the same month in 2023 and is the lowest August surplus since 2017, when it stood at $4.547 billion.

In the first eight months of the year, Brazil achieved a trade surplus of $54.079 billion, with exports totaling $227.00 billion and imports $172.92 billion. While this represents a 13.4 percent decrease compared to the same period in 2023, it is the second highest surplus for this period in the historical series, which has been tracking foreign trade statistics since 1989.

Falling prices

On the export side, the decline in international prices for soybeans, corn, iron, steel, and sugar was the main factor behind the drop in export value. However, increased sales of certain products, such as coffee and cellulose, partially offset the impact of falling prices for other commodities.

On the import side, purchases of medicines, engines, machinery, fertilizers, and chemicals increased. The largest rise, however, was in natural gas, which saw a 339.4 percent increase in value in August compared to the previous year. Brazil also imported 144.9 percent more fuel by volume, with prices up 79.4 percent in the same period.

Last month, the volume of goods exported declined by 6.5 percent, due to the end of the harvest for several products and reduced demand for iron ore in China. Prices also fell by an average of 1.7 percent compared to the same month last year. In terms of imports, the quantity purchased increased by 15.7 percent, while average prices dropped by 3.2 percent, reflecting a boost in foreign purchases driven by economic recovery.

According to Herlon Brandão, Director of Foreign Trade Statistics and Studies at the Ministry of Development, Industry, Trade, and Services, the reduced balance is primarily due to lower volumes of soybean and iron ore exports, as well as increased imports. He noted that the August surplus decline was anticipated and does not affect the government's projections but cautioned that a global economic slowdown could impact exports.