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Despite Low Dollar Brazil Expects US$ 197 Billion in Exports This Year

Embraer plant in Brazil Numbers disclosed by the AEB (Brazilian Foreign Trade Association) show that the Brazilian trade balance surplus this year should be around US$ 23.150 billion. This represents a 42.2% reduction in comparison with the balance registered last year (US$ 40.039 billion).

The vice president of the AEB, José Augusto de Castro, says that the reduction is not greater because exports have grown significantly, due to the high cost of commodities.

Even with the expressive retraction, he said that it is a "good surplus", because imports are growing almost 44%. Castro said that the weight of basic products in the Brazilian export basket should grow this year. According to him, basic products should, certainly, break a record from the 1980s.

"Manufactured products should also break an export record, but a negative one. For the first time, they should be below 50% of the export basket, due to prices. Exchange rates are not helping export manufactured products, while in basic products the price of commodities causes them to be on a high level," analyzed Castro.

The AEB is concerned about the trade balance result for 2009 because commodities, in general, are losing strength. "And we do not know what energy they will have in 2009. If prices drop, we may certainly have a trade deficit in 2009. With exchange rates giving signs that they should remain stable next year, imports should continue growing. Maybe not at the percentage we are noticing this year. But any smaller percentage, accompanied by a reduction in exports, is bound to become a trade deficit," explained the vice president at the organization.

The study disclosed by the AEB forecasts expansion of 22.5% for exports this year, totaling US$ 196.760 billion. "It is a surprising increase, as it is in comparison with a very high base," defined Castro. Last year, he recalled, exports had already reached a strong US$ 160.649 billion.

When considering that global exports should grow between 14% and 15% in 2008, this means that Brazil is growing above the average of global trade. AEB forecasts have already exceeded the target established by the minister of Development, Industry and Foreign Trade of Brazil, Miguel Jorge, who had estimated US$ 190 billion.

The vice president at the AEB estimated that if the forecast for 2008 comes true, Brazil may reach 1.25% participation in global trade this year, which is the percentage established by the government as a target for 2010. Castro underlined, however, that this target is being reached due to the price increase. "And I imagine that the government would like it to be reached due to greater volume."

The three main products exported by Brazil in terms of value – iron ore, petroleum in bulk and soy – in grain and bulk – are part of the list of basic products and are the only ones that exceed US$ 10 billion each. The manufactured product in the best position is aircraft, with US$ 5.4 billion.

The AEB believes that depreciation of the Brazilian real affects the profitability and competitiveness of manufactured products, meaning loss of foreign market share. The organization also adds that the appreciation of the Brazilian currency should remove around 300 companies from foreign trade, especially micro, small and medium ones.

ABr

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  • Show Comments (4)

  • AUGUSTUS

    CH.C SHOULD RATHER WORRY ABOUT SWIFT THEFT OF JEWISH GOLD & THE SHAMEFUL CONDUCT OF SWISS BANKS
    Gentlmen:
    How much more offense are you all (Brazilian readers) willing to take from the disrespectful, offensive person who answers by the designation À¢€œch-cÀ¢€Â, and who indubitably ranks among the LOWEST possible level of the Swiss class system. As much as I try to ignore this offensive, disrespectful, obsessive Swiss person, I find myself incapable of controlling control my fingers and next thing I know I find myself expressing my UTMOST OUTRAGE for the way, which this VILE VERMIN is tolerated!
    Instead of worrying about the shameful, racist, anti-foreigner stance of his boring country, and instead of taking steps against the full fledge Neo-Nazi political parties which govern (or otherwise control) some or most CANTONS which is formally constitute the multi-cultural À¢€œmumbo-jumboÀ¢€Â called SWITZERLAND, ch.c is on a mission of pry into Brazilian affairs, in order to identify any possible excuse (even for justifiable issues) to vomit his unacceptable insults towards Brazil and BraziliansÀ¢€¦
    What amazes me the most is his ability and disposition to visit, as my sites as possible in order to enter additional insults, AS IF he were entitled to do so, AS IF he were a civilized individual, while, in fact, he lacks the very basic levels of human DIGNITY and surely does not know the meaning of the word “respect”!
    If ONLY we were NOT in this horrific 21st Century (where technology permits ANYONE to express offensive remarks with impunity), ch-c would be dealt with accordingly! Surely my noble ancestors would have shown the likes of ch-c (and his lowly forefathers) when and how to SHUT UP along with the proper place to which his kind belongs – in the gutter!
    Now, I must only beg the pardon of ANY gentleman and/or lady who may have been distressed by my disagreeable, albeit unavoidable emotional outburstÀ¢€¦

    Augustus Severus

  • ch.c.

    Dear Bill !!!!
    To my knowledge, and if you can read the substance of an article, the headline and the article is talking about
    Brazil exports AND NOT internal production/consumption.

    Stupid question Dear Bill, what do you know about Brazil stats and their internal OR GDP production ?
    To my knowledge……and I wish you could prove me wrong, is that most Mercosur countries ALSO have a higher GDP
    per capita than….BRAZIL !!!!
    LAUGH….LAUGH…LAUGH

    Ohhhhhh dear idiot Bill, I also realize you did not pay attention to the headline contradiction saying
    “DESPITE Low Dollar Brazil Expects US$ 197 Billion in Exports This Year”
    when it should be :
    “BECAUSE of Low dollar…….” !!!!!

    No doubt you also got a Brazilian University Degree….in economics….found in a detergent pack, dear Bill !

    Have you not learned in your junior schooling about the balance of power maths ??????
    Yessssss….when you measure something in a currency that went down by lets say 20 %, one must increase its sales by 25 % to be just BREAK EVEN !!!!!

    Now let me finally test your basic knowledges, if you have one :
    What has been the Brazil exports growth….in Brazilian currency ?????????????????????

    LAUGH….LAUGH….LAUGH….LAUGH !!!!

    Have you ever heard a developed nation using a weak or strong foreign currency …..as a base for their export growth rate ?
    Not to my knowledge.
    Only emerging countries do this trick and of course only when the US$ is weak to show a manipulated stat.
    Because when the US$ is strong ALL of these countries revert to their own correncies to show continued growth…by definition !!!

    The US$ as a base in stats should be used only when comparing stats between TWO OR MORE countries.
    Not against its own past performance….by definition.
    Otherwise the GDP growth rate is FAR FAR FAR HIGHER than published…..when measured in a weak foreign currency !!!

    Ohhhhh….I wonder if you could catch what I am saying, dear Bill !!!!

    😀 😉 😀 😉 😀 😉 😀 😉 😀 😉 😀 😉 😀 😉

  • Bill

    Dear ch.c,

    Probably you are ignorant about Brazil.

    Brazil has, by far, the strongest internal market in the region so “exports” don’t mean “total production”.

  • ch.c.

    Or said otherwise…..
    ….This is BELOW MOST other Mercosur members when adjusted……. on a per capita basis !!!!!

    Laugh….laugh….laugh….laugh !

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