Ports adopt special scheme for fertilizers, says minister

AEB estimates drop in trade balance next year

The Brazilian Foreign Trade Association (AEB) released, this Tuesday (20), its forecast for the 2023 trade balance. to the US$ 332.825 billion estimated for this year. Imports should total US$ 253.229 billion, with a decrease of 6.2% compared to the US$ 269.900 billion estimated for 2022.AEB estimates drop in trade balance next year

As for the trade surplus, the AEB estimates that it will reach US$ 71.933 billion in 2023, with expansion of 14.3% over the US$ 62.925 billion forecast for this year. The surplus of US$ 71.933 billion in 2023 will be a record, even with the forecast of a drop in exports and imports, and will surpass the previous record of US$ 61.223 billion, calculated in 2020.

In an interview with Brazil Agency, the executive president of the AEB, José Augusto de Castro, stressed, however, that it is a negative surplus, because it does not generate any economic activity. “It is a negative surplus because it results from a double deficit and does not generate any economic activity,” he said.

According to Castro, the commodities (agricultural and mineral products traded on the international market) will continue to be the flagship of Brazilian exports next year, although with the possibility of a drop in prices over the period. “Prices have already begun to settle, as a result of a series of factors,” he said.

Factors

Among these factors, Castro mentioned the slowdown in the world economy, the low economic growth in China, Ukraine’s war with Russia, the rise in interest rates in the United States and the European Union. “These are all factors that keep international trade and the economy from heating up. On the contrary.”

Castro argued, on the other hand, that “whatever the price”, commodities will continue leading national exports and admitted that an unpleasant surprise could arise if the European Union decides to tax the commodities as a whole. “This could affect Brazil from 2024 onwards”. The expectation, however, is that Brazil will continue with high surpluses, with commodities acting as a flagship for exports.

Soybeans, oil and ore should account for 35.7% of Brazilian exports projected for 2023, showing stability compared to the 35% verified in 2022. With the exception of automobiles and semi-finished products of iron and steel, which are manufactured products, the remaining 13 main products exported by Brazil are commodities🇧🇷

Reforms

Castro defended tax and administrative reinforcements to reduce the Brazil cost and bring manufactured goods to a prominent position in the country’s trade balance. “We depend on many commodities and a few manufactured products”, he pointed out. According to the AEB, the competitiveness of manufactured exports has South America as its main destination, but the region faces political or economic problems. “We can’t count on South America as an end market,” said Castro. “Without reforms, we’ll stay put.”

For Castro, the floating exchange rate remains at an adequate level. The exchange rate should fluctuate between the floor of BRL 5 and the ceiling of BRL 5.70, during 2023, influenced by internal or external political and economic factors. “There will be no problem regarding the exchange rate, which helps exports. It is the Brazil cost that has to be reduced,” he said.

The executive president of the AEB added that GDP growth (Gross Domestic Product, sum of all goods and services produced in the country) for 2023, estimated between 1.4% and 1.5%, “is a low GDP, which does not it does not help, nor hinder foreign trade and does not stimulate internal growth, nor does it generate jobs in the internal market”. He insisted that the reduction of the Brazil cost would help the country to enter the North American and European markets with manufactured products, with greater added value.

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