Commodities and China dominate Brazilian exports in May, indicates FGV

Icomex confirmed the trend signaled in previous months

15.06.2020 | 20:59 (UTC -3)
Agency Brazil

The Getulio Vargas Foundation's Foreign Trade Index (Icomex), for May, released this Monday (15), confirmed a trend already signaled in previous months of an increase in Brazilian exports based on commodities (agricultural and mineral products sold on the international market) and destined for the Asian market, with a reduction for other destinations. According to FGV, the unstable scenario, with the devaluation of the real, does not favor sales of industrial products abroad, which remain in decline.

The trade balance balance was US$4,5 billion in May, US$1,1 billion lower than the value for the same month in 2019. In the year to May, the balance reached US$15,5 billion, a result lower by US$4,8 billion than in the same period last year. The lower performance in the interannual comparison of the accumulated until May is explained by the sharper drop in exports (-7,2%) in relation to imports (-2,5%), analyzed FGV.

As commodities accounted for 71% of Brazilian exports in May and are associated with the agricultural sector, whose increase was 44,2% between the months of May 2019 and 2020, followed by an 11,3% increase in the extractive industry. The manufacturing industry had another drop (-13,7%).

The volume exported by Brazil increased by 4,1% and the volume imported by 0,9% in the comparison between May 2020 and the same month in 2019. The increase in exported volume is explained by commodities, which increased by 23,7% in the comparison between the months of May and 10,9%, in the accumulated until May this year compared to the same period last year. In terms of value, exports of commodities fell 1,5% in May, compared to May 2019, and increased 4% in the year to May. “It should be noted that the increase in volume has been offset by the drop in prices in May (-20,5%) and in the January/May period (-5,2%), which explains the behavior of the value”, he highlights the Icomex. Sales of no commodities they fall when comparing the months of May (-27,7%) and the year to date (-20,3%), with a drop in prices in both cases.


FGV clarified that import data was affected by oil platforms in May this year. Imports showed a variation of 78,7% in May and 22,2% in the first five months of this year. Although these platforms operate in the country, they were registered with Petrobras subsidiaries abroad to obtain tax exemptions, according to Icomex. “With the institution of the special customs regime Repetro-Sped, in 2018, the platforms have been nationalized, which influences the value of imports. Without the platforms, imports in May would have fallen by 29% and the balance would have been US$7,3 billion, the highest balance since 2018. The balance would have been higher, but explained by the drop in imports driven by the downturn in economic activity”, indicates Icomex.

If we exclude platforms, there is a drop in capital goods of 39,9% (May) and 3,7% in the year to May, a result that affects the manufacturing industry. “We had registered a drop of 13,7% in the year-to-year comparison between May 2019 and 2020 and without the platforms this would be a greater decline of 19,5%”, indicates the study.

According to FGV, the recessive economic scenario explains the drop in purchases of machinery and equipment for the agricultural and industrial sector. For the agricultural sector, the results in terms of activity are positive, but the devaluation of the real makes the purchase of new equipment more expensive.


Icomex confirms that the dependence on exports from commodities, mainly in the agricultural sector, translates into the growing importance of China as a destination for national exports. In May, the volume exported to China grew 64,7% compared to the same month in 2019 and fell to the rest of Asia. Even so, China and the rest of Asia are the only markets with a positive variation when comparing the January/May period between 2019 and 2020, highlights the study.

China explained 32,5% of Brazilian exports and 20,8% of imports, in the period from January to May 2020. The Chinese market is considered essential for a favorable performance of Brazilian exports. In May, 78% of exports to China were made up of soybeans (52,8%), iron ore (13,4%) and oil (12,2%). Beef, pork and chicken accounted for 9,5% of exports to the country.

The biggest drops in Brazilian exports were observed in Argentina (-55,2%), Mexico (-46,6%), the United States (-36,8%) and other South American countries (-30%).


The prospects are not very optimistic, analyzed FGV's Icomex. The news released at the end of the second week of June about a possible new wave of the new coronavirus epidemic in China rekindled the warning of a still uncertain scenario, contradicting a “moderately optimistic” perspective on the resumption of activities in European, Asian and United States markets. . The World Trade Organization (WTO) continues to predict a drop in world trade of between 13% and 32% this year.

In Brazil, Icomex assesses that “the drop in imports and a favorable performance of commodities in the first half of the year mitigate pressure on the current account deficit”. The results in the second half of the year will depend on the resumption of economic activity in the world and in the Brazilian market.

LS Tractor February