The sum of exports and imports in the first half of 2022 is 62.5% high, and indicates that the year will close with the most robust result of the historical series
By Sérgio Siscaro
According to information from the Brazilian trade balance, the trade flow between Brazil and Canada – that is, the sum between exports and imports – between January and June 2022 totaled US$ (FOB) 4.991 billion. This is the most expressive result since the beginning of the historical series, exceeding by 62.5% the amount observed in the first semester of 2021, which was US$ (FOB) 3.07 billion.
This result confirms the trend that has been observed since the beginning of the century – that is, a gradual increase in trade between the two countries. Considering only the period of the first semester, it is possible to observe that, in 2002, the Brazil-Canada trade flow totaled US$ (FOB) 662.45 million. Ten years later, in the first half of 2012, it was already US$ (FOB) 2.678 billion.
If this pace is maintained, the result of 2022, considering the twelve months of the year, should exceed the US$ (FOB) 7.497 billion recorded between January and December last year. And the possibility of this happening seems quite real: in July 2022, the trade flow was US$ (FOB) 1.206 billion, the second best result of the year – and that already raises the accumulated amount in the first seven months of the year to almost US$ (FOB) 6.2 billion.
Data from the Quick Trade Facts analysis, produced by the Chamber of Commerce Brazil-Canada (CCBC), indicate that this growth in trade exchange was consistent throughout the semester, increasing from month to month – starting with US$ (FOB) 517.87 million in January and reaching US$ (FOB) 1.207 billion in June. Throughout the semester, the monthly average of the sum between exports and imports was US$ (FOB) 831.95 million.
Detailed data on the trade exchange between Brazil and Canada in the first half of 2022 can be checked in the two latest editions of Quick Trade Facts, which analyze the first and second quarters of the year.
Advances in exports and imports
The increase in trade exchange between the two countries has led to an increase in both exports and imports – which shows a certain degree of complementarity in trade. Brazilian sales to Canada totaled US$ (FOB) 2.5 billion, with an average of US$ (FOB) 416.74 million per month; the increase with respect to that recorded between January and June 2021 was 16%.
The exports included in the category that gathers inorganic chemical products and inorganic or organic compounds of precious metals, radioactive elements, rare earth metals or isotopes stood out in the period. Its rise was 34%, driven mainly by the sale of calcined alumina, silicon dioxide and divanarium pentoxide – which are used mainly by the pharmaceutical, automotive, glass and ceramics industries.
It is important to note that other products, with a lower weight in the trade balance, also recorded very significant jumps in sales to Canada, indicating possible increases in demand in the future. This is the case of copper (2,240%), cotton (897%) and aluminum (571%), for example. Encouraged by recent negotiations between the two countries, meat sales to Canada increased by 44% in the first half, compared to the same period in 2021.
In the opposite direction, Brazil imported the equivalent of US$ (FOB) 2.491 billion, or US$ (FOB) 415.2 million per month. The total represents an increase of 174% in comparison with the amount recorded between January and June 2021. Among the main highlights, it is worth mentioning the 454% increase recorded by chemical industry products – a result mainly driven by fertilizer imports from Canada, which increased substantially after Russia invaded Ukraine, a traditional supplier of Brazil, in February this year.
The increase in the exchange between Brazil and Canada, including in segments that previously did not appear in the bilateral trade balance, suggests interesting opportunities for inserting Brazilian products in Canada, and vice-versa. The director of Institutional Relations at CCBC, Paulo de Castro Reis, considers that Brazilian exporters often do not include Canada in their market radar.
“Companies end up getting used to some destination countries, and miss opportunities that are off their radar. In the case of Canada, companies may not only discover a new market to place their products, but also an interesting support point to expand their operations to other destinations, such as the USA or Europe”, he states.
On the other hand, Castro Reis highlights a recent initiative by CCBC, the Canada Hub, which acts as an accelerator for the soft landing of Canadian companies arriving in Brazil. “We offer a virtual office space, coworking and tax address for Canadians to register and open a CNPJ in the country. In addition, Canada Hub also contributes to the development of new business, identifying potential clients and partners, and making it possible to hold business meetings, for example.”