Brazil’s record trade surplus in 2023
Winter 2024 Mirian Campos
Brazil has hit a historical record in trade numbers in 2023, reaching USD 98.8 billion in trade surplus and outperforming the government projection of USD 93 billion for the year. This is the largest number ever recorded since the beginning of the data series in 1989. The main drive for the result was the export of commodities, corresponding to 69% of total exports, despite the drop in commodity prices. The number represents an increase of more than 60% in the trade balance in comparison with 2022 when the trade surplus reached USD 61.5 billion.
The total trade flow (the sum of imports and exports) in 2023 reached USD 580.5 billion, the second largest in the data series (4.3% lower than USD 606.7 in 2022). The second largest trade surplus was registered in 2022, at USD 61.8 billion, led by the increase in export prices. It is worth noting that the drop in import prices (-9.6%) was larger than the drop in export prices (-6.4%) for 2023, resulting in an increase of 3.6% in terms of exchange in comparison with 2022. Overall, the drop in commodity prices exceeded the drop in non-commodity prices.
China was once again the largest importer from Brazil (USD 104.3 billion), followed by the U.S. (USD 36.9 billion) and Argentina (USD 16.7 billion). The main exporting products were soybean (16%), oil (13%), and iron ore (9%). According to FGV/IBRE analysis, Brazilian exports of grains in general and soybean in particular (29.4%) benefited from the drought in Argentina, while the Ukraine-Russia war and crop issues in the U.S. helped boost corn exports (11.8%), which accounted for the second largest exports in the agricultural sector. Iron ore exports were fostered by Chinese investments in infrastructure. The surplus generated from agricultural and extractive sectors was not replicated by the manufacturing industry, with a USD 37.7 billion deficit. The decrease in the manufacturing industry deficit in comparison with 2022 (USD 57.2 billion), however, contributed to the overall trade surplus. A strong motor for the drop in the manufacturing industry deficit was the decrease in the imports of intermediate and capital goods, given the weak performance of the manufacturing industry in Brazil.
For 2024 the government expects a drop of 4.5% in the trade surplus, estimated at USD 94 billion. One reason might be the end of drought in Argentina and the normalization of crop conditions in the U.S., causing a decrease in soybean and corn exports. Nevertheless, expectations for the Brazilian agricultural sector remain highly positive for 2024. The FGV report “Conjuntura Econômica” projects a trade surplus for this year at USD 75 billion.