Brazil’s 2Q Trade Slows Down

Nov. 30, 2012
Brazil’s external trade by sea, measured in tonnes of goods moved, remains strong but trade by air, a lead indicator, has fallen below the pre-crisis peak, raising concerns over future performance, according to the latest data collected by the International Transport Forum at the OECD through August 2012

Brazil’s external trade by sea, measured in tonnes of goods moved, remains strong but trade by air, a lead indicator, has fallen below the pre-crisis peak, raising concerns over future performance, according to the latest data collected by the International Transport Forum at the OECD through August 2012.

  • Dependency on Asia-led growth is exposed. Asia as a trade partner shows resiliance as exports by sea continue to grow. Asia accounted for half of Brazil’s external trade in 2012, measured in tonnes of goods moved, compared with 25% in 2000;
  • Trade by road and rail with neighbouring countries remains stagnant, below pre-crisis levels.

Total external trade by sea, measured in freight tonnes moved, recovered to pre-crisis levels by the 4th quarter of 2009 and remains robust at 13% above the pre-crisis peak in August 2012. However, air freight cargo, considered to be a lead indicator, reveals uncertainties over future growth. External trade transported by air fell to 5% below pre-crisis levels in August 2012. Both imports and exports by air weakened to 4% and 11% below pre-crisis peak of June 2008, reflecting weak domestic and international market demand.

External trade by sea and air with North America remains strong, 10% and 11% above June 2008 levels respectively. In contrast, external trade with Europe has fallen to 13% below pre-crisis levels.

The on-going “Euro-crisis” reflects continuous weakening of domestic consumption in Europe. Exports from Brazil to Europe by sea and by air declined to 21% and 19% below pre-crisis levels. External trade by sea with Asia continues to expand with exports reaching 41% above the pre-crisis peak.

However, trade with other Latin American countries stagnated. Even though air cargo movements with Asia and Latin America remain strong (10%, 16% above pre-crisis levels), overall air freight trends, measured in tonnes of goods moved, show signs of a slowing down across all continents.