Business

Could the coronavirus outbreak create a supply shortage in Brazil?

Demand is heating up in Brazil—but the coronavirus outbreak could hinder the economy as local industries may find themselves without supplies from Asia

coronavirus outbreak economic effects
Empty street in Chengdu, Sichuan (China). Fears of infections have led a big chunk of China’s workforce to stay at home—either by choice or government imposition. Photo: B.Zhou/Shutterstock

The 7-percent rout of the Brazilian financial markets after the Carnival break is the most tangible outcome of the economic havoc caused by the coronavirus outbreak in Brazil so far. While markets are known for anticipating economic trends, the effects of the public health emergency have not yet been felt on the real economy—and they may come in some surprising areas.

China is Brazil’s main trading partner and accounts for roughly 28 percent of Brazil’s total exports—mainly commodities such as iron ore, oil, and agricultural goods. Therefore, a Chinese slowdown will have a clear effect on these...

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