Brazil: Exports dynamics bending further towards China amidst the trade war – BNP Paribas
Salim Hammad, analyst at BNP Paribas, notes that on a 12 month rolling basis, data shows that over the past year China has further cemented its position as Brazil’s top export market increasing its market share by 5 pp since November 2017 to now account for 30% of Brazil’s exports.
“At end 2017, Brazil already exported USD 20 bn more to China than it did to the US (USD 47.5 bn vs USD 27.2 bn) and while Brazil has a trade surplus with both economies, the surplus with China was roughly 10 times larger than that with the US (~ USD 20 bn).”
“Surely, Brazil’s exports suffer from concentration risk as 80% of its soybeans, 50% of its ores and 35% of its mineral fuels and oils (including crude) exports are absorbed by China. As Bolsonaro gets sworn in, there is no doubt that cherishing his relationship with Beijing will go a long way to upholding Chinese trade and investment in the country (Brazil’s attracts more than half of all Chinese FDI in Latin America).”