MercoPress. South Atlantic News Agency

Brazil with record trade surplus in August, despite an overall fall in global transactions

Most of the surplus increase in August is due to the fall in imports from the mining industry, down 59.51% year-on-year and the manufacturing industry, minus 23,78%

Brazil obtained a record trade surplus of US$ 6,6 billion during the month of August, the highest for the month since 1989. However overall dropped with exports sliding 5.5% to US$ 17,741bn and imports, 25,1%, to US$ 11,133bn. In eight months the trade surplus reached US$ 36,594bn, the third-best historically in the last forty years.

The cumulative export total for the first eight months of 2020 was US$138.633 billion, a decrease of 6.6% in comparison with year-ago levels, while imports totaled US$102.039 billion, down 25.1%.

Most of the surplus increase in August is explained by the fall in imports from the mining industry, which dropped 59.51% year-on-year, and from the manufacturing industry, whose purchases from abroad shrank 23.78%. On the export side, manufactured goods sales fell 14.2%, and for the mining industry fell 8.6%. In contrast, agricultural exports rose by 32.64%.

Agricultural highlights include soybeans, with sales of US$443.3 million year-on-year and raw cotton with a US$80.9 million increase. In the mining industry, exports of iron ore fell by US$ 442 million compared to August last year, and crude petroleum oils suffered a decrease of US$451.6 million. In both cases, the drop is due to the negative variation in international prices compared to 2019, because the volumes shipped were stable regarding iron ore and for oil increased 21%.

In the manufacturing industry, the largest declines were recorded in exports of non-electric engines and machines (-US$187 million), cellulose (-US$157.8 million), and petroleum fuel oils (-US$152.6 million). In addition to the COVID-19 pandemic, the Argentine situation, the main destination for Brazilian industrial exports, contributed to the result.

Finally according to the Focus bulletin, a weekly survey of financial institutions released by the Central Bank, market analysts predict a US$55 billion surplus for this year.