MercoPress. South Atlantic News Agency

Brazil trade surplus soars to 30bn, the highest since 2007

Soybeans and iron ore, key export commodities

Brazil's 2011 trade surplus soared 47.8% to nearly 30 billion dollars, compared with the previous year, the highest since 2007, with record exports and imports, official data showed Monday.

Last year, exports of goods rose 26.8% to 256 billion dollars while imports went up by 25.7% to 226 billion, the foreign trade ministry said.

“Brazil has never exported or imported so much. This is a sign of the dynamism of our foreign trade,” said Tatiana Prazeres, a spokeswoman for the ministry. The trade balance reached 482.2 billion, 25.7% more than between January and December 2010.

“This gives us a surplus of 29.7 billion, the highest since 2007” when it totaled 40 billion, said the ministry's executive secretary Alessando Teixeira.

Brazil, which last month supplanted Britain as the world's sixth largest economy, had its best year in exports largely due to high prices and strong demand for its key commodities such as soybeans and iron ore.

China was the main destination for Brazilian exports, followed by the United States and Argentina, officials said.

Imports also rose significantly although at a slightly lower pace in percentage terms than exports. Brazilian imports increased in all areas, from raw material and fuel to consumer goods and capital, with the United States, China, Argentina and Germany as main suppliers.

Though the government hopes to post a positive trade balance this year, it has not set any target due to the global uncertainty.

”Our expectation is that in 2012 we will have an increase (in activity) and a surplus, but we cannot yet set a target,“ said Teixeira.

Authorities pointed to the government's export incentives and the rise of the dollar in relation to the Real, the national currency which had appreciated in recent years, affecting the competitiveness of exports.

But Teixeira also underscored ”negative factors' which could hurt trade such stagnation in the Euro zone, slow growth in the United States and the lower performance of the Chinese economy.

“We also expect higher international competition for Brazilian products and a resumption of the ”currency war“, referring to possible currency manipulations by developed countries,” he added.

The Central Bank expects a 4.3% increase in exports this year, while private banks forecasts range from a 7% fall to a 5% increase.

“Imports should grow at a stronger pace than exports,” said the National Council of Industries in a recent report.