Brazilian Exports: Bears Still on the Loose

Brazilian exports Exports from Brazil amounted to US$ 21.766 billion in October, down 10.6% from the same month last year based on daily average figures. Exports have increased only to the Middle East (20.4%) and Eastern Europe (65.8%).

Sales to all other regions have declined. The figures were released this Thursday (1st) by the Brazilian Ministry of Development, Industry and Foreign Trade.

The performance was impacted by a 23.1% decline in exports of basic goods, particularly oil, coffee, iron ore, soy, cotton and soy meat. Exports of semi-manufactured goods were up 4.5%, and exports of manufactured goods were up 0.9%.

Year-to-date as of late October, exports stood at US$ 202.362 billion, down 5.5% from the same period in 2011 based on daily average figures. Basic goods exports were down 7.3%, semi-manufactured goods exports were down 9.2%, and manufactured goods exports were down 2%.

On the other hand, imports reached US$ 20.104 billion in October, down 0.5% from October last year based on daily average figures, resulting in a US$ 1.662 billion trade surplus.

In the ten-month period ended October, imports stood at US$ 184.976 billion, down 1.9% from the same period in 2011, resulting in a US$ 17.386 surplus on the Brazilian side.

Import Tax

The Foreign Trade Chamber (Camex, in the Portuguese acronym), which is the federal government’s policymaking organization for the sector, has lowered the import tax on 330 types of machines and equipment which are not manufactured in Brazil.

According to a statement released by the Brazilian Ministry of Development, Industry and Foreign Trade, the goal is to cut the cost of industry investment. Two resolutions on the issue were published on the Federal Official Gazette this Tuesday (31st).

The first resolution lists 322 capital goods whose taxes will drop from 14% to 2%, being 277 new items and 45 extensions. The second resolution sets forth a reduction from 16% to 2% in the tax charged on large-sized printers, and tax exemption on seven products relating to investment in digital TV technology. The tax breaks will remain in effect until June 30th, 2014, according to the ministry.

The rulings, according to the ministry, will lead to US$ 340 million in imports. The following industries will benefit the most: oil, autos, auto parts, railways, and mining. The main source countries are United States, Germany and Italy.

The projects in which these items will be used amount to a combined value exceeding US$ 7 billion, according to the ministry. Among them is a manufacturing plant with capacity for 200,000 vehicles a year in Rezende, in the state of Rio de Janeiro, a tire plant in the city of Rio de Janeiro, a fertilizer manufacturing unit in Três Lagoas, Mato Grosso do Sul, and expansion works on the green line of the São Paulo metro.

Read the full resolutions and product lists on www.camex.gov.br/legislacao/interna/id/994 and www.camex.gov.br/legislacao/interna/id/995.

Anba

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