Brazil has improved its performance by decreasing imports and increasing exports; and it is expected that the record seen in the 2022 trade balance will be repeated this year.
By Marcel Salim
According to the Quick Trade Facts study compiled by the Chamber of Commerce Brazil-Canada (CCBC), the first quarter of 2023 started strong in commercial exchange between Brazil and Canada.
The trade flow, which represents the sum of imports and exports, totaled US$1.95 billion (FOB) between January-March, representing a slight and continuous increase of 1.73% compared to the US$1.91 billion (FOB) achieved in the same period in 2022.
Brazil has continued to perform better in the bilateral relationship, stimulated by the growth in exports and by the achievement of new business. The trade surplus for Brazil was positive at US$ 483 million (FOB) in the first three months of this year.
The importation of manure and fertilizers from Canada, which gained prominence last year due to the conflict between Russia and Ukraine, decreased by 16% between January-March 2023, but remain strong and within expectation for the period in question.
Canada remained in the 13th position as the largest destination for Brazilian exports. As for the ranking of imports, the North American country ranked 18th in the period in question.
2023 is promising!
“After an all-time record high in the bilateral relationship between Brazil and Canada throughout 2022, when bilateral trade surpassed US$ 10 billion (FOB) mark for the first time in history, it is natural that seasonality occurs in this first quarter. However, we remain optimistic that both nations will intensify trade, especially given the extensive agenda of events already scheduled to unite the ties between the two countries,” says Ronaldo Ramos, president of CCBC, institution that this year celebrates 50 years.
“In our 50th anniversary, we are proud to see the results of this relationship that presents expressive numbers. The initiatives and trade missions already scheduled should further support the expansion of business between the two countries,” says Ramos.
According to Daniella Leite, director of Associates and Businesses at CCBC, “the increase in bilateral business, including the growing interest of Brazilian companies in presenting their products in Canada, confirms this perspective.
For Paulo de Castro Reis, director of Institutional Relations at CCBC, Brazil and Canada have never been so close: “The events held in different regions of both countries and the development of strategic partnerships have contributed significantly to identifying opportunities and expanding access to different markets. According to him, “Canada offers excellent conditions for Brazilian companies to internationalize”.
Exports gain prominence
Shipments to Canada totaled US$ 1.21 billion (FOB) between January-March 2023, an increase of 5% compared to the same period in the previous year, when foreign sales of US$ 1.15 billion (FOB) were recorded.
The main highlights in Brazilian exports to Canada, which have the greatest impact on the trade balance in the period were: gold (26% of total exports); alumina (aluminum oxide) representing 26% of the total; and aircraft and equipment, including parts (12%).
In the agribusiness sector, it is worth highlighting the data from the poultry meat market and its offal (edible, fresh, chilled or frozen), which accounted for US$ 13.6 million (FOB) in the first quarter of 2023, an increase of 71.2% compared to the US$ 5.67 million (FOB) recorded in the same period of the previous year.
When it comes to beef, the increase was 235%, from US$ 3.63 million (FOB) to US$ 5.17 million (FOB) in the same comparison base. The result reflects the end of the embargoes – occurred in March 2022 – imposed by Canada on Brazilian exports of beef and pork.
Imports are expected to continue
Canadian product purchases totaled US$ 733.9 million (FOB) between January-March 2023, a decrease of 3% compared to the same period in 2022, when they amounted US$ 759.6 million (FOB). The drop is attributed, in particular, to the purchase of fertilizers. The decrease was 16%, to US$ 426.4 million (FOB).
The reduction is explained by the conflict between Russia and Ukraine, which began in February 2022. At the time, Russia (until then the largest supplier of these products to Brazil) interrupted exports, prompting Brazilian businessmen to import manure and fertilizers from Canada, which caused a boom in the demand for these two products.
On the other hand, Brazil increased its imports of aircraft and other equipment (including parts) by 525% in the first quarter of 2023, totaling US$ 45 million (FOB). Another highlight is aluminum, which jumped 462%, to US$ 11.4 million (FOB) in the first three months of this year.
Access complete data and analysis in CCBC’s report: Quick Trade Facts