2019 – The Year of Brazilian Trade

Tags: Global Economy, Global Logistics

With continual shifts in the global landscape, countries from around the world are increasingly looking to Brazil as a partner ripe for trade and investment. Brazilian stocks have already reached an all-time high in the first half of the year, showing that the country is truly starting to make its mark as a key, competitive player on the global stage. With the country’s natural resources, innovative businesses, and creative mindset, Brazil has catapulted to the front of the international trade frontier, with three key exports in particular shaping Brazilian trade: machinery, sustainable agriculture, and aerospace.

Machinery

In 2017, Brazil was the United States’ 19th largest supplier of goods imports, with machinery taking the lead as the top import category, totaling $2.3. billion. Brazil’s business initiatives in particular are paving the way for the country to secure a title as a machinery powerhouse. For instance, AGCO, one of the largest U.S. tractor companies, announced late last year that they were dropping “made-in-China” products in favor of Brazilian alternatives. Additionally, Brudden Equipments, a Brazilian machinery corporation, introduced the DSC-18, a product that allows coffee growers from top-producing nations like Colombia to expedite the harvesting process, projected to save farmers a whopping 20% in costs.

From May 2018 to June 2018 alone, Brazil’s machinery sector revenues were up 23% because of increased equipment and machinery net sales. Imports for that same time period increased as well (to $1.25 billion), in addition to export totals growing to a staggering $871.77 billion (up 15.8% from the previous year). These examples of cutting-edge innovation and growth in the sector are what will continue to propel the country forward in 2019 and beyond in the area of machine-related exports.

Leveraging Sustainable Agribusiness

With a year-round growing season and science-based approach to agriculture, the sector has always been one of Brazil’s strongest export areas. Since the creation of Embrapa (the Brazilian Agricultural Research Corporation) in 1973, innovative techniques and scientific advancements have been developed specifically for Brazil’s tropical agriculture industry. Further, the country is dedicated to sustainable agriculture, investing in regulatory frameworks and initiatives that support the environment. Consider Brazil’s integrated crop livestock and forestry production models (ICLF), which have led to a revolution of carbon-neutral Brazilian beef, as well as the Brazilian “Forest Code,” which ensures permanent, mandatory protections of Brazil’s native vegetation (the Forest Code even goes as far as to state that 80% of the area on all rural properties located in the Amazon biome must be reserved for native vegetation, and only 20% of land in this region can be used for economic activities and infrastructure).

Recent numbers show that those investments are paying off as well. With farmers dedicated to using the cutting edge farming technology being developed in the country, combined with their extensive experience cultivating land in a sustainable way, a recent study by the United States Geological Survey (USGS) revealed that Brazil’s crop areas cover 7.6% of its territory, compared to most countries that use around 20% to 30%. What’s more, according to the Ministry of Agriculture, Brazil’s tropical soils produce 236.7 million tons of grain crops per year, which means the country is naturally suited to help provide sustainable agri-food products to economies worldwide.

All of this has allowed Brazil’s agribusiness exports overall to hit a record high of $101.7 billion dollars last year. Preliminary signs point to these numbers increasing even more in the latter half of 2019 because of the country’s focus on implementing an agricultural system based on productivity and sustainability, rather than expansive land usage. While being productive and conscious of larger global food security and sustainable food trends, Brazil is showing the world its potential to be a leader in the area of agriculture.

Leading Aerospace Innovation

Brazil is also taking flight as one of the top six aircraft producers in the world. In the U.S., aircraft engines and turbines rose from the 20th largest Brazilian import in 2012 to the second largest in 2017. A contributing factor to this was Embraer S.A. – the 3rd largest world commercial jet manufacturer – which had announced a $4.75 billion joint venture with Boeing, the top American multinational aircraft corporation. Together, these two big companies in the aerospace sector will make great strides in the technological advancement of the aerospace industry at the global-level.

Home to Embraer’s headquarters, São José dos Campos in Brazil has become a major global hub for aerospace innovation, from design to production. The city boasts a plethora of world-class research institutions, including the Aeronautics Institute of Technology. Boeing even recently opened a research facility in the city after recognizing its dominance in the industry. The Boeing Research & Technology-Brazil Center will help to “grow Brazil’s capabilities in ways that benefit aerospace and help meet the country’s goals for economic and technology development,” according to the President of Boeing Brazil. In hosting these institutions and being a part of partnerships that will move the entire industry forward, Brazil is helping to invest in the next global generation of aircraft manufacturing, positioning the country extremely well to lead the way in international aerospace trade.

It is clear Brazil’s future as a trade powerhouse is extremely bright, and 2019 will undoubtedly continue to move forward as the “Year of Brazilian Trade” because of this excellence in exports, especially across the machinery, sustainable agriculture, and aerospace sectors.

 






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