Export is a powerful tool that a nation has to achieve the prosperity and well-being of its citizens.
Within economic logic, in short, it is quite simple to understand that if a country sells much more than it buys, it will manage to obtain an interesting volume of wealth for the generation of jobs, investments and new business opportunities.
Year after year, Brazil has gained notable prominence in the international trade scenario, especially with regard to the export of commodities.
In today's text, we will learn more about this important aspect of the national economy and understand the international scenario of commodities.
International sales are a constant necessity for Brazil's economic health.
Big Brazilian exports
The big question is how to enter a global market, with fierce competition with other major world powers that, in many cases, are looking to export goods similar to Brazilian ones.
This international competitiveness causes the dispute to offer the best prices to reduce margins and force exporting companies to seek the best deals in terms of cost-effectiveness.
In this regard, the so-called “large exports”, that is, operations with a very large volume of exported products are the solution found so that even with a lower price, it is still possible to make a profit and guarantee long-term contracts for the supply of goods.
The importance of agribusiness to the economy
When talking about businesses with large volumes of cargo involved, agribusiness certainly stands out as one of the main exponents in the Brazilian international scenario.
Agribusiness can be understood as the sum total of production operations and distribution of agricultural supplies, production operations in the production unit, storage, processing and distribution of agricultural products and the items produced through them.
It is important to point out that an exporting nation like Brazil needs to pay attention to the necessary balance between selling abroad and, at the same time, supplying the domestic market.
Brazilian agribusiness shows all its strength by ensuring not only the country's supply, but also a leading role in the large volumes exported by Brazilian companies.
In the year 2021, Brazilian agribusiness represented 27.4% of GDP (Gross Domestic Product).
Brazilian export data
But speaking of exports, do you know what Brazil exports the most?
Let's take a look at some of the 2021 Trade Balance figures released by the Federal Government, always in terms of each fiscal year.
Brazil broke a surplus record in 2021, sealing the historic series with U$61.2 billion in surplus.
The surplus occurs when exports of Brazilian products exceed imports.
Among the main items exported by the country are:
- Iron Ore (42.2 Billion);
- Soy (37.3 Billion);
- Crude petroleum oils (27.4 Billion);
- Sugars and molasses (8.5 Billion);
- Beef (7.4 Billion);
- Soy Meals (7.2 Billion);
- Petroleum fuel oils (6.6 Billion);
- Other products – Manufacturing Industry (6.4 Billion);
- Poultry meat (6.3 Billion);
- Cellulose (6.1 Billion).
The historical result was largely due to the increase in total exports, with a growth of 34.2% compared to the previous year.
Commodity exports accounted for 67.7% of the entire volume exported by the country, and even with a drop of 1.8% in volumes of exported products, Brazilian foreign trade benefited from the 38.9% variation in commodity prices to increase the results of international sales of this trade item.
What is a commodity?
So we saw that commodities represent the biggest “slice of the cake” of Brazilian exports, but let's find out once and for all what this term means.
A commodity is by definition, according to the Oxford Languages dictionary:
- any good in the raw state, ger. of agricultural origin or of mineral or vegetable extraction, produced on a large worldwide scale and with homogeneous physical characteristics, whatever its origin, ger. intended for foreign trade.
- each of the primary products (eg, coffee, sugar, soybeans, wheat, oil, gold, various ores, etc.), whose price is determined by international supply and demand.
- any mass-produced product.
In other words, commodities are considered to be all goods that do not have the characteristics of having undergone industrialization processes and are traded in large volumes, as they are necessary for the production of other products. They are normally goods in their raw state.
Commodities in the international market
Commodities represent a prominent factor in the international economy.
There are even several investment funds focused only on this type of asset, due to the specific characteristics of this type of asset.
One of the points of attention is the variation in commodity prices that may vary according to issues beyond national borders. Commodity pricing takes place in accordance with international market demand rules, that is, if a consumer country has an internal problem that affects the demand for a given commodity, the sale price for the Brazilian producer is impacted, even when it comes to sale to the national market.
Due to this volatility, combined with the high values involved in these international transactions, investors and financial speculators are increasingly aware of the commodity race between producing countries.
New World Commodity Order
Two major global factors are helping to reshape the global commodity business, the Covid-21 pandemic and the conflict between Russia and Ukraine.
Commodity producers realized with these two great phenomena that there was a great dependence on some specific countries on the international scene regarding items of high importance.
Good examples were the PPE equipment, respirators and medical supplies that were concentrated in Chinese suppliers during the height of the pandemic. In addition, as a more recent example, we see the concentration of fertilizer supplies by Russia and Ukraine, which directly impacted Brazilian agribusiness in the short term.
In response to this finding, specialists in international economics point to increasingly growing movements towards a redistribution of the supply of the main inputs used by industries in the world.
What is expected is that the large concentrations of commercial power in some countries are better balanced, since this dependence on a commodity tends to decrease in the same way that the exploitation of other products tends to increase.
Despite the negative consequences, great opportunities arose with the war in Russia and Ukraine for p
Export is a powerful tool that a nation has to achieve the prosperity and well-being of its citizens.
Within economic logic, in short, it is quite simple to understand that if a country sells much more than it buys, it will manage to obtain an interesting volume of wealth for the generation of jobs, investments and new business opportunities.
Year after year, Brazil has gained notable prominence in the international trade scenario, especially with regard to the export of commodities.
In today's text, we will learn more about this important aspect of the national economy and understand the international scenario of commodities.
Big Brazilian exports
International sales are a constant necessity for Brazil's economic health.
The big question is how to enter a global market, with fierce competition with other major world powers that, in many cases, are looking to export goods similar to Brazilian ones.
This international competitiveness causes the dispute to offer the best prices to reduce margins and force exporting companies to seek the best deals in terms of cost-effectiveness.
In this regard, the so-called “large exports”, that is, operations with a very large volume of exported products are the solution found so that even with a lower price, it is still possible to make a profit and guarantee long-term contracts for the supply of goods.
The importance of agribusiness to the economy
When talking about businesses with large volumes of cargo involved, agribusiness certainly stands out as one of the main exponents in the Brazilian international scenario.
Agribusiness can be understood as the sum total of production operations and distribution of agricultural supplies, production operations in the production unit, storage, processing and distribution of agricultural products and the items produced through them.
It is important to point out that an exporting nation like Brazil needs to pay attention to the necessary balance between selling abroad and, at the same time, supplying the domestic market.
Brazilian agribusiness shows all its strength by ensuring not only the country's supply, but also a leading role in the large volumes exported by Brazilian companies.
In the year 2021, Brazilian agribusiness represented 27.4% of GDP (Gross Domestic Product).
Brazilian export data
But speaking of exports, do you know what Brazil exports the most?
Let's take a look at some of the 2021 Trade Balance figures released by the Federal Government, always in terms of each fiscal year.
Brazil broke a surplus record in 2021, sealing the historic series with U$61.2 billion in surplus.
The surplus occurs when exports of Brazilian products exceed imports.
Among the main items exported by the country are:
- Iron Ore (42.2 Billion);
- Soy (37.3 Billion);
- Crude petroleum oils (27.4 Billion);
- Sugars and molasses (8.5 Billion);
- Beef (7.4 Billion);
- Soy Meals (7.2 Billion);
- Petroleum fuel oils (6.6 Billion);
- Other products – Manufacturing Industry (6.4 Billion);
- Poultry meat (6.3 Billion);
- Cellulose (6.1 Billion).
The historical result was largely due to the increase in total exports, with a growth of 34.2% compared to the previous year.
Commodity exports accounted for 67.7% of the entire volume exported by the country, and even with a drop of 1.8% in volumes of exported products, Brazilian foreign trade benefited from the 38.9% variation in commodity prices to increase the results of international sales of this trade item.
What is a commodity?
So we saw that commodities represent the biggest “slice of the cake” of Brazilian exports, but let's find out once and for all what this term means.
A commodity is by definition, according to the Oxford Languages dictionary:
- any good in the raw state, ger. of agricultural origin or of mineral or vegetable extraction, produced on a large worldwide scale and with homogeneous physical characteristics, whatever its origin, ger. intended for foreign trade.
- each of the primary products (eg, coffee, sugar, soybeans, wheat, oil, gold, various ores, etc.), whose price is determined by international supply and demand.
- any mass-produced product.
In other words, commodities are considered to be all goods that do not have the characteristics of having undergone industrialization processes and are traded in large volumes, as they are necessary for the production of other products. They are normally goods in their raw state.
Commodities in the international market
Commodities represent a prominent factor in the international economy.
There are even several investment funds focused only on this type of asset, due to the specific characteristics of this type of asset.
One of the points of attention is the variation in commodity prices that may vary according to issues beyond national borders. Commodity pricing takes place in accordance with international market demand rules, that is, if a consumer country has an internal problem that affects the demand for a given commodity, the sale price for the Brazilian producer is impacted, even when it comes to sale to the national market.
Due to this volatility, combined with the high values involved in these international transactions, investors and financial speculators are increasingly aware of the commodity race between producing countries.
New World Commodity Order
Two major global factors are helping to reshape the global commodity business, the Covid-21 pandemic and the conflict between Russia and Ukraine.
Commodity producers realized with these two great phenomena that there was a great dependence on some specific countries on the international scene regarding items of high importance.
Good examples were the PPE equipment, respirators and medical supplies that were concentrated in Chinese suppliers during the height of the pandemic. In addition, as a more recent example, we see the concentration of fertilizer supplies by Russia and Ukraine, which directly impacted Brazilian agribusiness in the short term.
In response to this finding, specialists in international economics point to increasingly growing movements towards a redistribution of the supply of the main inputs used by industries in the world.
What is expected is that the large concentrations of commercial power in some countries are better balanced, since this dependence on a commodity tends to decrease in the same way that the exploitation of other products tends to increase.
Despite the negative consequences, great opportunities arose with the war in Russia and Ukraine for commodity producing countries, mainly in Latin America.
According to data released by the Bank of America (BofA), some factors together make it possible for countries like Brazil to enter the international commodities market even more strongly.
The aspects mentioned by BofA are the increase in commodity prices, the high Selic rate that motivates international investment and the independence of Russia and Ukraine, with the exception of fertilizers.
This makes the South American countries to boost exports of crude soy oil, lead ore, grains and iron ore even more.
commodity producers, mainly from Latin America.
According to data released by the Bank of America (BofA), some factors together make it possible for countries like Brazil to enter the international commodities market even more strongly.
The aspects mentioned by BofA are the increase in commodity prices, the high Selic rate that motivates international investment and the independence of Russia and Ukraine, with the exception of fertilizers.
This makes the South American countries to boost exports of crude soy oil, lead ore, grains and iron ore even more.
