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Brazil's surplus with China totals R $ US $ 28.8 billion from January to September, says FGV

Posted by Rafael Moro

China was responsible for 68% of the Brazilian trade balance accumulated from January to September 2020. Brazil's surplus with China was US $ 28.8 billion in the period. The data are from the Foreign Trade Indicator (Icomex) released by Fundação Getulio Vargas (FGV).

The trade balance in September was US $ 6.2 billion, the highest in the monthly historical series since 2001. In the accumulated result from January to September, the surplus was US $ 42.2 billion, the second largest. According to FGV, the country is expected to end the year with a surplus of approximately US $ 58.5 billion.

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The volume exported by Brazil grew 0.4% from January to September 2020, compared to the same period of the previous year. The volume imported in the period decreased 8.1%. In comparison with September 2019, exports fell 4.0% in volume in September this year, while imports shrank 18.7%.

"The sharp devaluation of the real effective exchange rate helps to contain imports and cheapens the prices of Brazilian products in foreign trade," pointed out FGV, in a note.

However, the strong devaluation of the Brazilian currency against the dollar also increases costs in sectors that use imported inputs and components, such as the automotive and electronic segment.

"Agriculture is also burdened in terms of its inputs; however, the weight of those imported into this sector is less and Chinese demand has ensured the growth of our exports. Another relevant issue is how foreign trade operators are analyzing the devaluation. Foreign trade demands a look that goes beyond the short term In this context, even with the strong devaluation of the real, exporters and importers tend to be more cautious and may be postponing decisions, such as replacing foreign suppliers with domestic goods, "added FGV.

Source: Notícias Agrícolas