Brazil exports to China likely to grow less this year

Brazil’s exports to China—the main buyers of Brazilian goods—are likely to continue on the rise this year, but at a lower pace than 2018. The forecast was made by the Getulio Vargas Foundation (FGV).

The trade war between the US and China benefited Brazil’s market with the Chinese, especially for soybeans. In 2018, soybean sales to the Asian country surged 35 percent and China was the destination of 82 percent of soybeans exported by Brazil.

China, however, should start buying soybeans from the US again, a move that had been suspended following commercial disputes between the two countries. This is expected to make a negative impact on the Brazilian product, which is already likely to see a smaller harvest this year.

Another good to be dealt a blow in 2019 is chicken. According to FGV, China set tariffs on Brazilian chicken imports.

Durable goods

The changes will also take its toll on another front. The Argentinian economy is believed to retract this year, causing an impact on the purchase of Brazilian vehicles, FGV experts argue. The neighboring country is the main buyer of Brazilian vehicles, which will lead to an impact on the amount exported under durable goods this year.

In January this year, for instance, a 45 percent reduction in the amount of durable goods exported has already been reported, comparing to the same period last year.

Nonetheless, China was still the main destination of Brazilian exports, and increased its share from 18.3 to 20.9 percent against January last year. Argentina, in turn, has lost some of its market, plunging from 7.1 to 3.7 percent, the fifth position on the ranking of Brazil’s main markets overseas.