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.

Key Quotes

“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).”