Cheapening of Commodities Makes Exports Fall 16%

08/04/2015 - 09h01

Despite having exported a record amount of its key commodities in the first seven months of this year, Brazil has seen its export revenue fall 16% over the same period of 2014.

The fall in international prices of products such as oil, soybeans and iron ore (which are among the most exported items by the country) was the main factor that brought down the exports.

The amount of oil shipped to other countries, for example, grew 52% from January to July, but the price of the product dropped almost in half.

Considering all the products exported by Brazil, the amount sold increased 7%, but prices fell 21%. In other words, Brazilian exporters have sold more but received fewer dollars than in the same period last year.

The government estimates that the rise of the dollar against the Brazilian real has partially offset these companies, but said it did not measure the impact of that.

In addition to the lower commodity prices, some of the major partners of the country have been reducing their appetite for Brazilian products.

This is the case of China, which reduced its purchases by 19.4%, compared to the first seven months of 2014.

With the slowdown of its economy, China has decreased its demand for raw materials not only in Brazil but all over the world, something that is being reflected by the drop of global commodity prices.

Sales abroad have also been affected by lower demand from trading partners such as Mercosur and the European Union.

Translated by DENISE MOTA

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