E-commerce could help Brazil diversify its exports to China

While China is Brazil’s main trading partner by a mile, the portfolio of Brazilian exports to the Asian giant revolves mainly around oil, iron ore, and soybeans. This leaves the country gravely exposed to any hiccups in the Chinese economy, such as the ones caused by Beijing’s zero-Covid policy which has placed tens of millions of people under strict lockdown and again imposed a sort of stranglehold on the global economy.

Brazil’s exports to China rose from USD 2 billion in 2001 to USD 87.7 billion in 2021, per the Economy Ministry. Commodities account for the lion’s share of these exports, with Brazilian sales of manufactured products directed to closer markets, such as Argentina. Last year, Brazil maintained a record level of trade dependence on China, with a third of its national exports going to the Asian country.

The situation should not change much in 2022. In Q1, China accounted for 71.1 percent of Brazil’s exports of soybeans, 59.3 percent of its beef exports, 58.8 percent of iron ore sales, and 40.4 percent of crude oil exports. Overall, Brazilian exports to China grew by 8 percent year-on-year in Q1 2022. 

The pace is slower than export growth to other countries, but this can be explained by fewer soy shipments due to the soybean off-season. Iron ore sales were also affected during these months due to higher than normal rainfall in Minas Gerais. 

“So, it is natural that China starts the year with smaller relative importance....