This overview of Brazil’s economy focuses on the main commodities imported and exported by Brazil, and how these play a role in the global economy.
Contents
More, we explore Brazil’s top imports and exports by volume.
Overview Of Brazil’s Economy
When it comes to commodities, Brazil is a major player. Its investment in agriculture and a number of other key commodities makes it a serious competitor in world trade.
Its consistently strong agricultural performance is one of the pivotal reasons why this country is so competitive in many export markets.
Brazil’s Top Five Exports
- Sugarcane $10.4B
- Soybeans $19B
- Coffee $4.84B
- Beef $3.59B
- Orange juice $2.1B
Other Notable Exports
Brazil’s Top Five Imports
- Agricultural and industrial machinery $21.1B
- Electrical machinery and equipment $16.9B
- Mineral fuels including oil $15.1B
- Vehicles $10B
- Organic chemicals $8.3B
Other Notable Imports
- Turbo-jets $2.7B
- Transmission shafts, clutches, gears $1.2B
- Centrifuges, filters and purifiers $757M
- Automobile parts $4.9B
- Armored vehicles and tanks $60.7M
Export data based on OEC figures for 2016 – Total exports of $182B
Overview Of Brazil’s Commodity Trade
Brazil imports and exports dozens of commodities alongside the previously mentioned products.
Sugarcane
Bioelectricity is clean and renewable energy using the bagasse of the sugarcane for 80% of the biomass, meeting the consumption needs of at least five million people in the country.
Brazil is the leading sugar producer and exporter in the world and accounts for 20% of global production and 40% of world exports. About 75% of the sugar produced is exported to more than 100 different countries.
Soybeans
There are currently an estimated 29 million hectares of land in Brazil used for farming soybeans and its annual production quantities can vary from between 66 million metric tons to 94 million metric tons.
Brazil accounts for about 30% of global production of soybean crops and it is currently the second largest producer of soybeans worldwide, with the United States taking top spot with a 42% market share.
What Makes Brazilian Soybeans Special?
One of the main reasons why soybeans are produced in such quantities in Brazil is because they often have higher protein levels than those grown in other parts of the world.
This enables growers to command higher prices for their product on international markets.
The country also produces a substantial quantity of non-genetically modified soybeans (non-GMO) which sell for a higher price than their genetically modified counterparts.
Coffee
Brazil leads the way as the largest coffee-producing nation in the world, achieving annual coffee production figures of 2,592,000 metric tons.
The second-largest producer is Vietnam, with 1,650,000 metric tons, and Columbia in the third spot with 810,000 metric tons.
Coffee plantations in Brazil span 27,000 square kilometers with the bulk of these situated in the southeastern states of Minas Gerais, Parana, and Sao Paulo, where the climate and temperature provide optimum growing conditions.
Beef
Brazil has an estimated 210 million head of cattle and the country is currently the second-largest commercial beef producer in the world.
Beef exports accounts for about 3% of total Brazilian export revenues and the beef sector accounts for about 14% of global beef output, compared to the U.S, for example, which contributes about 15% of total world output.
Orange Juice
Although regions in Spain and places like Florida in the US are synonymous with orange juice, Brazil is actually the largest orange producer in the world, by some margin.
Approximately 35% or all the world’s oranges comes from Brazil and the country is also responsible for more than half of all the orange juice distributed across the globe.
Poultry
Brazil is the second-largest poultry producer in the world but claims a prime position as the largest poultry meat exporter.
Despite its prominent position in the poultry industry, Brazil has never suffered a case of Avian Influenza.
More than 150 different countries eat Brazilian chicken.
Corn
Although Brazil has become one of the world’s most important crop producers, outdated infrastructure is proving a problem.
In Mato Grosso, storage capacity is only half of the recommended safe margin by the UN Food and Agricultural Organization.
This means that some of the record corn crops are vulnerable to the elements.
Tobacco
Brazil produces in the region of 100 million kg of Burley tobacco annually, which is a similar output to the United States.
Its largest tobacco output in is the annual production of over 700 million kg of Flue-Cured Virginia leaf tobacco.
This makes it one of the world’s top tobacco producers and exporters overall, beating the combined output of the United States and India of around 480 million kg.
Ethanol
Brazil is the world’s largest sugarcane ethanol producer and can also claim to be leading the way in using it as a viable motor fuel.
The growth of sugarcane ethanol and flex fuel vehicles has helped reduce Brazil’s carbon emissions of carbon dioxide by 350 million tons.
Iron Ore
Brazil is the second-largest exporter of iron ore, accounting for 18.5% of the market compared to Australia which dominates with 55%, but some way ahead of South Africa in 3rd place at 5%.
Iron ore and gold are the top two metals exports and it is the third largest producer of bauxite in the world, holding an estimated 10% of global reserves.
The world’s largest iron ore producing company is the Brazilian mining corporation Vale.
Rice
Brazil is the ninth-largest rice-producing country in the world and the largest outside of Asia, contributing about 1.8% of global rice production.
Cattle Semen
Cattle semen from highly-regarded Brazilian dairy breeds is in demand due to a good level of adaptability to different types of climate, longevity and higher productivity traits.
Brazilian Zebu cattle are proving resilient to global warming factors and this is why their semen is the top export of its kind and an important part of the worldwide cattle breeding scene.
Mineral fuels
Including oil, mineral fuels account for about 11% of total imports in Brazil with an estimated annual value of $15 billion.
The country’s reliance on oil imports and other mineral fuels has fallen by almost 20% but it is still a net importer.
Summary Of Other Imports And Exports
Here is an summary of Brazil’s commercial import and export sectors.
Agricultural And Industrial Machinery
The extensive farming sector of Brazil’s economy makes it a dynamic and growing market for agricultural equipment and it is the only country that achieves surplus in agricultural machinery import and export trade.
Brazil is one of the few countries in the world that still has the capacity to increase its planted area, meaning it will need more machinery if large parts of the savanna or prairie region are cultivated.
Electrical Machinery And Equipment
Imports of electrical machinery and equipment are in the region of $17 billion and this represents about 12% of total imports.
Brazil accounts for just 1.5% of the total global import figures for electrical machines and apparatus, compared to the United States which imports 25% of the annual figure.
Commercial Vehicles
The fact that vehicle imports are about 7% of the total imports is interesting when you consider that the fifth-largest country on the planet enjoys less than 15% of paved roads to drive on.
The growth of the middle-class in Brazil could see Brazil become the third-largest car market after China and the United States.
Organic Chemicals
Brazil imports in the region of of $35 billion in chemical products with Potassium Chloride being the top imported product in this sector.
In view of its heavy emphasis on agriculture it is not surprising to see pesticides and fungicides in the top-ten of chemical imports, although blood fractions and modified immunological products are the third top chemical product import.
Turbo-Jets
Brazil imports about $2.7 billion of turbo-jets annually as part of a total value of around $138 billion worth of imported goods.
Nigeria is one of the exporters of turbo-jets, propellers, and other gas turbines to Brazil.
Transmission Shafts
Brazilian importers spend in the region of $1.2 billion annually on transmission shafts, gears, and clutches.
Centrifuges, Filters and Purifiers
Import figures for centrifuges, filters, and purifiers are around $750 million and this has risen by a third as part of an increase in demand for imported machinery amongst Brazilian businesses.
Automobile Parts
Brazil imports almost $5 billion of automobile parts and accessories.
This is the fastest-growing import and is in line with the growth in sales of automobiles, although it still ranks fourth overall amongst Brazil’s top imported items.
Armored Vehicles and Tanks
Brazil imports in the region of $60 million of armored tanks and vehicles which is a steady increase on previous annual figures.
This includes the transfer of vehicles from the U.S Army which are anything up to 30-years old but have been fully maintained and will not require updating before being put into operation.
Brazil’s Role In The Global Economy
Agriculture represents approximately 5.8% of GDP compared to 20.9% for industry and 73.3% for services according to latest estimates.
According to IMF data, Brazil’s GDP is the size of Argentina, Mexico, and Venezuela combined.
Brazil is one of the so-called BRIC economies (Brazil, Russia, India, China) who were all deemed to be at a similar stage of newly advanced economic development.
Soybeans: The Most Exported
Brazil is currently ranked as the 21st largest export economy in the world and soybeans currently rank as the top export product with $19 billion, representing 10.4% of the total exports of the country.
Mining still makes a significant contribution and accounts for almost 23% of the country’s exports.
Brazil is also developing a significant role as a global energy player with recent discoveries of large oil and gas reserves off the coast.
The country is also a major player when it comes to biofuels, especially ethanol, which features prominently in Brazil’s energy outlook.
Mostly Raw Commodity Exports
Data shows that raw materials account for about 45% of Brazil’s exports and with commodities such as iron ore, soybeans, sugarcane, and coffee taking such a large share of export output, it is a country that is dependent on sustaining domestic and overseas demand.
Any adverse commodity price developments have a direct impact on the Brazilian economy and any slowdown in China, which takes 18% of Brazil’s total exports, will put further pressure on the economic performance of the country.
Although the country has made concerted efforts to redress the balance by investing in growing its manufacturing sector, agriculture, energy, and mineral commodities are still hugely significant to the economy.
Where Can I Trade Commodities?
If you’re familiar with Brazil’s most traded commodities and want to what regulated brokers offer in , see the list below:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74%-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.
Further Reading & Sources
If you’d like to learn more about commodities and the ways you can trade them, visit the following trading guides:
- CFD Trading Guide: How Do CFDs Work?
- Options Trading With Regulated Brokers
- How To Buy Bullion: Introduction To Bullion Trading
- Stock Trading Guide
Part of the information used on this page comes from:
