By Jamil Chade (via Estadao).

Brazil moves to register its worst year of trade with Europe in a decade. Official data shows that the trade surplus with the EU has never been weaker since 2002.

First, the European crisis curbed local consumption hence reducing imports. Second, the overvalued Real and the lack of competitiveness of the Brazilian industry ended up weighing in the final bill. As a matter of fact, counting only trade with Portugal, the fall in sales is 30%, the largest decline in at least 23 years.

In 2011, the trade balance with Europe registered a US$6.5 billion surplus. But up to August this year, the scenario was quite different. Brazilian exports to Europe fell 7.3% while European imports in Brazil increased by more than 4%, resulting in an overall surplus of just US$1.1 billion.

It is expected that by the end of the year the surplus will reach US$2 billion, but even so, the volume is equivalent to trade in 2002, when the surplus was a mere US$2.1 billion. To put this ins perspective, in 2007, before the crisis, Brazilian exports to EU registered a surplus of US$13 billion.

Not even in 2009, at the peak of the crisis, trade was so dismal. Back then, the surplus was US$4.8 billion.

But what worries the government the most is that sales to EU’s largest markets have been in a decline trend. Exports to Italy fell almost 10%, while exports to France are down 9%. With¬†Germany, the fall in exports is even greater. Compared to the period of Jan-Aug 2011, this year’s sales drop was 21%. Commodity exports alone to Germany dropped 23%.

The most concerning of all this is the fact that, in recent years, trade with Europe was one of the pillars that allowed Brazil to maintain its trade surplus. With the economies of the G-8, Brazil will complete his fifth year trade deficit. Until August, the hole reached $ 10 billion to these countries.

Source: Estadao

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3 Responses to Brazil’s trade surplus with Europe at 10-year low

  1. Julio says:

    (sarc on) … Brazilian bundas sell well in Portugal :) … quality product made in brazil…however due to current portuguese debt crisis, portuguese are forcing brazilians bundas price down, so i guess its a hard decision for brazilians bundas, either they accept the new price in Portugal or they return to Brazil the country of the future where eveything (products and services) is high quality and low price, salaries are higher and eveybody is happy with poor living standarts (sarc off)

  2. mondant says:

    A table with the relevant numbers would be otimo…

  3. Pat says:

    Brazil cant even export quality bananas anymore… this country is a TOTAL FAKE…everything is mega expensive and poor quality…salaries are so low, people spend most money on food…..who cares if theres plenty of land in brazil if food is so expensive…who cares if theres a automobile industry in brazil if cars are so expensive and poor quality….i guess brazilian people dont care about NOTHING …. banks, politicians and big corporations do whatever they want in brazil… brazilian people is lazy, accept eveything and dont fight for nothing.

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