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Montevideo, October 6th 2022 - 16:54 UTC

 

 

Russia almost doubles exports' value to Brazil in first half of 2022: mainly fertilizers and fuel

Monday, August 15th 2022 - 09:50 UTC
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Bolsonaro did not respond to requests to adhere to sanctions and maintained the dialogue with the Kremlin, including opting for abstentions in UN resolutions Bolsonaro did not respond to requests to adhere to sanctions and maintained the dialogue with the Kremlin, including opting for abstentions in UN resolutions

Russia almost doubled the value of its exports to Brazil in the first half of this year and has climbed to fifth supplier of Latin America's largest economy. This despite the trade, financial and diplomatic sanctions imposed on Russia by the United States, the European Union and the United Kingdom following its invasion of Ukraine.

The West measures hoped to suffocate the Russian economy and force an end of the war, but president Vladimir Putin made it clear that he would redirect his sales: this was the message sent to other countries at the BRICS summit in June.

During the first months of the war, US, EU and UK pressured the Jair Bolsonaro government to adhere to initiatives to isolate Russia. And there was even a distrust reaction towards Bolsonaro when on the eve of the Russian invasion of Ukraine, he visited the Kremlin. And more recently, Ukraine’s President Volodymyr Zelensky has repeatedly criticized Bolsonaro’s stance on the war.

In mid-July, the two presidents spoke on the phone. “I ask that all trading partners join the sanctions against the aggressor,” Zelensky said on his social media when explaining the conversation with Bolsonaro.

But Bolsonaro did not respond to requests to adhere to sanctions and maintained the dialogue with the Kremlin, including opting for abstentions in UN resolutions against Putin. In certain cases, Brazilian diplomats criticized the sanctions against Russia, warning that the measures could cause a substantial increase in world hunger.

With no sanctions in place, government data confirmed the expansion of the flow of exports from Russia to Brazil. Between January and July 2021, the country imported the equivalent of US$ 2.6bn from Russia. And in the first seven months of 2022, the figure rose to US$ 5.1bn. Brazil sales to Russia also increased particularly, shipments of soybeans and sugar, but value was modest, from US$ 843 million in 2021 to US$ 1.1bn this year.

Furthermore from the 11th position in the ranking of countries with the highest share of the Brazilian market in 2021, Russia currently climbed to fifth position. In other words Russia recorded more sales to Brazil than Mexico, South Korea, Japan, Canada, and the aggregate of all countries of the Andean Community. At the current rate, it is not impossible that the volume may exceed the purchases of Argentine products made by Brazil, valued today at US$ 7.1bn in the first seven months of the year.

Two aspects weighed. The first was the increase in fuel prices, which resulted in an increase in imports to Brazil in terms of value. The same phenomenon occurred among the Europeans and other partners.

But diplomatic sources also indicated that another important aspect was Brazil’s decision to bring forward the import of fertilizers from Russia, precisely to guarantee supplies for Brazilian agriculture. One of Brazil's fears was that sanctions would affect the ability to transport and finance cargoes of fertilizers.

Brazil anticipates that the trade flow with Russia will continue at a rapid pace. The fact is that imports from Russia increased by 127% between July 2021 and July 2022, one of the most significant increases among Brazil’s key trade partners.

Likewise Brazil received a license from the Russian government to start importing diesel as well, in a clear measure that aims to help reduce fuel prices in the country in an election year..

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