USA-Brazil Trade: The Role of Agricultural Exports

 The trade balance data for Brazilian agribusiness in July demonstrates the consistent year-on-year growth of our exports. In the current month, the total worth of goods exchanged internationally amounted to US$ 14.2 billion, indicating a little decline of 0.1% compared to the corresponding time in 2022. By the conclusion of the month, the agriculture and livestock sectors had an excess of US$ 8.9 billion in products. In July, soybeans dominated our agriculture export sector, accounting for 33.5% of overall exports and generating a revenue of US$ 4.8 billion. This represents a 1% growth compared to the corresponding time in 2022. Raw sugarcane, the second highest exported commodity, experienced a 23.2% growth compared to July 2022, generating a revenue of US$ 1.2 billion. Additional noteworthy exports in the Brazilian agribusiness sector were soybean bran, corn, and cellulose.

In July 2023, China was the primary recipient of Brazil's exports, accounting for 36.3% of the total. The European Union followed with a share of 12.5%, and the United States with 5.6%. Additionally, notable proportions were observed in other nations: Japan (3%), South Korea (2.6%), Argentina (2.6%), Indonesia (2.5%), Mexico (2%), Vietnam (1.9%), and Thailand (1.8%). Similarly, Indonesia saw a notable increase of 81.7%, mainly driven by the rise in soybean bran exports, resulting in a US$ 76.5 million increase in revenue.

Notable trade imbalance: orange juice According to the "Citrus" report from the US Department of Agriculture, Brazil is the leading global supplier of orange juice, responsible for over 70% of total exports by volume. Brazilian exports reached a total of over 1.3 million tons in 2022. The overall value reached US$ 2.0 billion, representing a growth of 21.7% compared to the previous year. From the beginning of the year until July 2023, the total value of Brazilian orange juice exports amounted to US$1.2 billion.

In 2022, exports to the European Union experienced a growth of 13.2% compared to the previous year, while exports to the United States showed a more significant increase of 62.5%. From the beginning of the year until July 2023, the exports to the European Union had a decline of 1.8% in comparison to the corresponding period in 2022. Conversely, in the same comparison, exports to the United States experienced a significant growth of 88.2%. Leaders from 24 U.S. agribusinesses and trade groups will be participating in a trade mission organized by the U.S. Department of Agriculture (USDA) to São Paulo and Recife, Brazil from September 25th to 29th. The purpose of this mission is to investigate potential avenues for increasing agricultural exports and strengthening business ties with Brazil.

"The increasing population and higher individual income in the country, along with the favorable perception of U.S. products and brands by Brazilian consumers, make this market highly valuable for American exporters." In the previous year, Brazil acquired agricultural and associated commodities worth around $1.4 billion from the United States. In 2016, the main exports from the United States to Brazil were ethanol, wheat, prepared foods, and dairy goods.

"Many individuals and companies lack knowledge about the initial steps and specific locations to commence exporting to a particular market," stated Slupek. "USDA trade missions provide them with the chance to gain firsthand knowledge about local markets, establish personal connections with potential customers, and showcase superior, American-made agricultural products." The group journeying to Brazil embodies a variety of American products, including processed foods, specialty food components, bulk commodities, and ethanol. Brazil surpassed the United States as the leading global exporter of soy and beef over a decade ago. This year, it is anticipated that the country would surpass the United States in corn exports and strive to achieve the first position in cotton.

The Ministry of Agriculture in Brazil has announced that the country is projected to achieve a historic production of 1.15 trillion reais, equivalent to $230 billion, in the current year. Brazil, which is rated fifth globally in terms of land area, holds the distinction of being the leading producer and exporter of soy, coffee, and sugar. Additionally, it has the second position globally in terms of cotton production, trailing only the United States. Furthermore, it plays a substantial role in supplying beef and poultry. Agricultural firms make up around 25% of Brazil's Gross Domestic Product (GDP), and they contributed to 50% of the country's export earnings in the first half of the year.

Research on genetic alterations, soil pH adjustment techniques, fertilizer application, and pesticide development have all contributed to Brazil's agricultural achievements. As a result of these advancements, the country is now capable of increasing the production of soy, corn, and cotton in tropical regions. The main destination for Brazilian orange juice exports was the European Union, which demanded 58.8% of the total exported by Brazil in 2022, i.e. US$1.2 billion. The second main destination was the United States.