First quarter proves the dynamism of Brazil-Canada trade

Exports and imports reach the highest level in recent years; manufactured and semi-manufactured products are highlighted

By Sérgio Siscaro

Os bons resultados do comércio exterior entre Brasil e Canadá ao longo de 2021, quando totalizaram uma corrente de comércio (ou seja, a soma entre The good results of foreign trade between Brazil and Canada throughout 2021, when they totaled a trade flow (that is, the sum of exports and imports) of US$ (FOB) 7.478 billion, show that the process of expansion of business between the two countries should continue in 2022. This is what the Quick Trade Facts study indicates, prepared by the Chamber of Commerce Brazil-Canada (CCBC) based on data from the Brazilian trade balance.

According to the survey, in the first quarter of 2022 the flow of trade between the two countries jumped a significant 36.58%, from US$ (FOB) 1.39 billion to US$ (FOB) 1.9 billion. The trade balance was positive for Brazil, at US$ 385.6 million.

It is the first time that the sum of exports and imports between Brazil and Canada has reached this level. It is worth remembering that ten years ago, in 2012, bilateral trade was just US$ (FOB) 1.29 billion, falling to its lowest level in 2014, when it totaled US$ 976.8 million. Since then, however, the results have become more expressive – pointing to a greater complementarity of the two economies in the coming years.

Record level in shipments

Exports to Canada totaled US$ (FOB) 1.145 billion, an increase of 21% compared to the first quarter of 2021, when foreign sales of US$ (FOB) 943.47 million were recorded. Comparing this result to previous years, it can be seen that the amount was the most expressive in terms of shipments to the Canadian market of the decade, and the first that exceeded the barrier of one billion dollars.

In this first quarter, the distribution of exports by aggregate factor observed in 2021 was maintained. Once again, manufactured products predominated (whose share rose from 43.5% to 46.4%) and semi-manufactured products (from 49.8 % to 44.7%), leaving basic products with a share of 8.9% (compared to 6.6% in the previous year).

The main highlights of Brazilian shipments to Canada were products from the chemical industries, especially for fertilizers; items related to the mining industry, such as minerals, precious or common metals, and miscellaneous machinery. Exports of sugar and coffee also gained relevant space.

Imports keep up pace

Exports to Canada totaled US$ (FOB) 1.145 billion, an increase of 21% compared to the first quarter of 2021. On the import side, the same trend of expansion of bilateral trade was verified in the first quarter of this year – when the purchases of Canadian products totaled US$ (FOB) 759.6 million – or 68% more than in 2021, when they totaled US$ (FOB) 451.28 million. As with exports, the result of imports is also the best in the last ten years – and has shown consistent expansion since 2017.

There was a significant change in the distribution of products imported from Canada by aggregate factor. Semi-manufactured products, which in 2021 accounted for 34.9% of the total, have now jumped to 68%. Manufactured goods fell from 53.2% to 30.3% share, while basic goods shrank from 11.9% to just 1.7%.

Thus, the highlights were purchases of products from the chemical (here also with emphasis on fertilizers) and plastic industries, pharmaceutical items, machinery and various instruments, in addition to nuclear reactors and spacecraft and aircraft.

Reduction of restrictions and exchange rate impact results

According to the CCBC study, February was the month with the highest value in terms of trade between the two countries. It was also the period in which Brazilian exports showed more expressive values than imports. In the case of shipments, a possible cause for this result is the scenario of reduction of restrictions caused by the Covid-19 pandemic, which may have had a relevant impact on export results.

On the other hand, the increase in imports was favored by the average exchange rate of the US dollar, which dropped in the first quarter of this year – reaching R$ 5.23.