Brazil set to register first trade surplus with Europe in a decade

Brazilian goods exports to Europe continued to rise in terms of value in the third quarter of 2021, to the European Union by 44.1% compared to the same period last year for a total of US$10.1 bn (£7.3bn) , and to the UK by 8.5% for a total of US$ 801.4m (£581.3m). The exports are Brazil’s highest for a third quarter to the EU since 2013, and to the UK since 2014, which means the country is on course to record its first annual trade surplus with the EU since 2011.

The figures are published today in the latest Europe Trade Monitor report from Apex-Brasil, the Brazilian Trade and Investment Promotion Agency.

This means that Brazil has recorded a goods trade surplus with the EU of $471m (£341.6m) in Q3, which is the highest for a single quarter since 2011. Brazil registered a quarterly trade surplus with the UK of $110m (£79.7m).

Resurgent demand driving stellar export value performance 

The figures resulted from strong demand in key sectors such as metal ores, oil, sugar and artwork as well as high global commodity prices, allowing Brazilian exports to maintain the positive upward trend seen in 2021 and support Brazil’s economic recovery. Specifically, significant increases in the value of exports to the EU were noted for oil, metal ores and soy. The strong global commodity prices have been a result of a confluence of resurgent demand and restricted supply. Demand on the UK side was dominated by artwork, sugar and wood products.

In the EU a number of important factors contributed to the positive export picture. Brazilian oil enjoyed strong demand caused by both high commodity prices on the international market and skyrocketing natural gas prices, with exports rising by 112% to reach $893m (£647.8m). This year’s soy harvest – expected to provide record yields after a slow planting season – saw exports of the legume rise sharply to the EU in Q3 by 48% to reach $2bn (£1.4bn). Meanwhile metal ores were buoyed by the ongoing recovery of continental Europe’s manufacturing sectors, with exports growing by over 100% to reach $1.5bn (£1bn).

In the UK, works of art registered a stellar quarter with exports soaring by a staggering 1,751% to reach $22m (£17.4m). A sector highly exposed to seasonal fluctuations, it was badly impacted by the pandemic which forced closures of museums, galleries and fairs across Europe. But the Q3 figures are proof of the sector’s resilience and its continued recovery post-pandemic. This was bolstered by the resumption of in-person events like the October Frieze Art Fair in London, one of the biggest contemporary art fairs in the world, which saw large volumes of Brazilian art being brought to the UK.

The value of sugar exports to the UK grew by 65% to reach $55m (£39.8m) despite reduced production caused by unusually harsh frosts in June and July which hurt Brazil’s sugarcane-growing regions in the centre-south. Brazilian wood products exports to the UK rose sharply by 53% to reach $39 (£28.2m) with strong demand for sawn wood and wood sheets to supply the UK’s home renovations market.

Commenting on the figures, Igor Celeste, Apex-Brasil’s Market Intelligence Department Manager, said: “There are huge positives to take from the past quarter. Not just for our strong performances in agriculture and commodities but also our cherished arts sector which is firmly on its road to recovery. Brazil continues to support its trade partners in Europe to build their economic recovery through agriculture, manufacturing and the creative economy. We are optimistic heading into the final quarter that we can improve on these positive trade values and build our shared prosperity in 2022.”  

In terms of inbound trade from Europe to Brazil, the country registered strong demand for EU and UK products in the quarter. Imports from the EU grew in value in the third quarter by 32.7% compared to 2020 to reach $9.6bn (£6.9bn), especially for chemicals (up 36% or $638.1m [£462.9m]), transport equipment (up 49% or $509.9m [£369.9m]), and mechanical appliances (up 37% or $331.2m [£240.2m). Imports from the UK grew by 9.6% to reach $691.8m (£501.8m) with the biggest demand for British spirits (up 120% or $24.1m [£17.4m]), pharmaceuticals and chemicals (up 81% or $37.5m [£27.2m]) and transport equipment (up 36% or $25.2m [£18.2m]).

 

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Media contact
Roshini Bains,
Editor, International Confectionery

Tel: +44 (0) 1622 823 922
Email: editor@in-confectionery.com

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