After reaching the historical record level of US$ (FOB) 7.478 billion in the current of trade in 2021, that is, the sum of exports and imports, Brazil and Canada are already showing signs that the process of expanding business between the two countries should continue in 2022, reveal data from the Quick Trade Facts study, prepared by the Chamber of Commerce Brazil-Canada (CCBC).

In the first quarter of 2022, the flow of trade between the two countries jumped a significant 36.58%, from US$ (FOB) 1.39 billion to US$ (FOB) 1.9 billion. The trade balance was positive for Brazil, at US$ 385.6 million.

It is the first time that the trade flow between Brazil and Canada has reached this level in the last 10 years. In 2012, the total value was just US$ (FOB) 1.29 billion, falling to its lowest level in 2014, when it totaled just US$ 976.8 million. Since then, however, the results have become more expressive – pointing to a greater complementarity of the two economies in the following years.

Record level in shipments

Exports to Canada totaled US$ (FOB) 1.145 billion between January and March 2022, an increase of 21% compared to the first quarter of last year, when foreign sales of US$ (FOB) 943.47 million were recorded.

Comparing this result to previous years, it is observed that the amount was the most expressive ever seen in the last decade in terms of shipments to the Canadian market, and the first that exceeded the barrier of one billion dollars.

In this first quarter, the distribution of exports by aggregate factor observed in 2021 was maintained. Once again, manufactured products predominated (whose share rose from 43.5% to 46.4%) and semi-manufactured products (from 49.8 % to 44.7%), leaving basic products with a share of 8.9% (compared to 6.6% in the previous year).

The main highlights of Brazilian shipments to Canada were products from the chemical industries, especially for fertilizers; items related to the mining industry, such as minerals, precious or common metals, and miscellaneous machinery. Exports of sugar and coffee also gained relevant space.

Imports on the rise

The same trend of expansion of bilateral trade was seen on the import side in the first quarter of 2022 – when purchases of Canadian products totaled US$ (FOB) 759.6 million – or 68% more than in the first three months of 2021, when they totaled US$ (FOB) 451.28 million. As with exports, the result for imports also reflects the best performance in a decade – and has shown consistent expansion since 2017.

With regard to the basket of products, there was a significant change in the distribution of imports from Canada by aggregate factor. Semi-manufactured products, which in 2021 accounted for 34.9% of the total, have now jumped to 68%. Manufactured goods fell from 53.2% to 30.3% share, while basic goods shrank from 11.9% to just 1.7%.

Thus, the highlights were purchases of products from the chemical (here also with emphasis on fertilizers) and plastic industries, pharmaceutical items, machinery and various instruments, in addition to nuclear reactors and spacecraft and aircraft.

Minor impact of Covid and exchange rate stimulate results

The CCBC study reveals that February was the month with the highest value in terms of trade between the two countries. It was also the period in which Brazilian exports showed more expressive values than imports.

In the case of shipments, a possible cause for this result is the scenario of reduction of restrictions caused by the Covid-19 pandemic, which may have had a relevant impact on export results.

On the other hand, the increase in imports was favored by the average exchange rate of the US dollar, which dropped in the first quarter of this year – reaching R$5.23.

Services:

Access data and analysis in the full CCBC study: Quick Trade Facts

About the Chamber of Commerce Brazil-Canada (CCBC).:

The Chamber of Commerce Brazil-Canada (CCBC) is an independent, non-profit organization maintained by the private sector, founded in 1973. It has been an important link for 49 years, bringing together people, companies, public and private institutions from various fields of activity. in the two countries. The extensive network of relationships and long-term expertise are the basis for solid trade promotion work in the Brazilian and Canadian markets, including exports, imports and investments. The initiatives also cover the areas of finance, infrastructure, education, technology and innovation, culture, gastronomy and social.