The devaluation of several commodities (primary goods with international prices) and the increase in imports resulting from the economic recovery caused the trade balance surplus (exports minus imports) to plummet in October. Last month, the country exported US$4.343 billion more than it imported, a drop of 52.7% compared to the same month in 2023 and the worst result for October since 2017 (surplus of US$4.095 billion).
With October’s result, the trade surplus in the first ten months of the year reaches US$63.022 billion. The amount is 22% lower than the same period in 2023, but it is the second best for the period in the historical series, which measures foreign trade statistics since 1989.
In relation to the monthly result, exports fell, while imports soared, driven by natural gas and capital goods (goods used in production). In October, Brazil sold US$29.461 billion abroad, a decrease of 0.7% compared to the same month in 2023. Purchases from abroad totaled US$20.501 billion, an increase of 22.5%.
On the export side, the drop in the international price of soybeans, corn, iron, steel and sugar were the main factors that caused the drop in the value sold. Sales of some products, such as coffee, cellulose and beef, rose last month, offsetting the decrease in prices of other products.
On the import side, purchases of medicines, engines, machines, fertilizers and chemical fertilizers rose. The biggest increase, however, was related to natural gas, the value of which purchased increased by 306.6% in October compared to October last year. Brazil imported 187.3% more fuel volume, with a 41.5% higher price in the same comparison.
Last month, the volume of exported goods rose 6.6%, driven by coffee, beef and cellulose, while prices fell 6.7% on average compared to the same month last year. In imports, the quantity purchased rose 34.2%, but average prices fell 8.5%, indicating the increase in foreign purchases resulting from the economic recovery.
Sectors
In the agricultural sector, the drop in prices had a greater impact on the reduction in exports. The volume of goods shipped fell 5.3% in October compared to the same month in 2023, while the average price fell 7%.
The manufacturing industry was the exception, with the quantity exported rising 9.2%, with the average price increasing 0.8%. In the extractive industry, which encompasses the export of minerals and oil, the quantity exported rose 10.3%, while average prices fell 22.2%.
I estimated
In October, the government had revised downwards the trade surplus projection for 2024. The estimate fell by US$79.2 billion to US$70 billion, a drop of 28.9% compared to 2023. In the previous forecast, from July, the drop was estimated at 19.9%. This was the last projection of the year.
According to the Ministry of Development, Industry, Commerce and Services, exports are expected to fall 1.2% in 2024 compared to 2023, ending the year at US$335.7 billion. Imports will rise 10.2% and close the year at US$264.3 billion. Purchases from abroad are expected to increase due to the recovery of the economy, which increases consumption.
Forecasts are more pessimistic than those of the financial market. The Focus Bulletin, a survey of market analysts released every week by the Central Bank, projects a surplus of US$77.78 billion this year.
