Since the arrival of the coronavirus pandemic in Brazil last year, the country’s biggest commodity exports have seen massive price spikes. Soybeans are now 57 percent more expensive today, while the price of oil and iron ore rose 231 percent and 154 percent, respectively.
And this spectacular rise in prices has a considerable effect on the Brazilian economy.
Still wrestling with the coronavirus crisis, 15 million workers are unemployed in Brazil, according to official statistics. And this does not even include people who have abandoned job searches altogether due to Covid-19. At the same time, poverty is becoming more prevalent and inequality is deepening, while food prices for average consumers are going through the roof.
Even so, the extractive industry and agribusiness were the driving forces for Brazil’s surprising 1.2 percent GDP growth in Q1 of this year, offsetting poor results for manufacturers and the services sector.
A survey conducted by The Brazilian Report on export data shows the impact of commodity prices on Brazil’s positive Q1 results. While the volume of the country’s top 10 selling products has remained largely stable since January 2020, the overall revenue from these sales skyrocketed in recent months.
And the rally applies to most commodities, not just Brazil’s major exports. In June, the Bloomberg Commodity Index reached its highest level since 2015 and raised suggestions that the global economy could be entering a new supercycle.
During the FT Commodities Global Summit that same month, Alex Sanfeliu, head of Cargill’s World Trading Group, called the rally a “mini-supercycle” that could last for two to four years.
Search
