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Brazil’s 2Q Trade Slows Down

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.

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