Brazil and the Future of the World

SÃO PAULO – The participation of the Port of Santos in the Brazilian trade flow reached 28.3% in the beginning of 2022, surpassing the 27% benchmark that had served as a reference for foreign trade analysts for years. This number was the result of a 16% growth in cargo handling, reaching the mark of 10.6 million tons.

This indicates that, if it weren’t for the unexpected war declared by Russia against Ukraine, the participation of the Port of Santos in the country’s trade flow might have come close to 30% this year. This movement was primarily due to shipments of cellulose, corn, and soybeans, with China being our primary trading partner, accounting for 26.8% of the commercial transactions passing through the Port of Santos. São Paulo was the Brazilian state with the highest participation in this cargo movement, reaching 53%.

The numbers show that Brazil’s vocation as a food supplier to the world remains strong. However, despite all the efforts of the National Confederation of Industry (CNI) and state federations, the country continues to lose ground among exporters of manufactured products. In January, containerized cargo operations at the Port of Santos recorded a 2.54% increase compared to the same period in 2021, marking the best performance for that month. This suggests that the growth trend observed last year compared to 2020, at the height of the coronavirus (COVID-19) pandemic, has continued. Now, there are concerns that this trend may be disrupted by developments in the war in Eastern Europe.

After all, the movement of containers to China, now the world’s largest commercial power, has been lower, and fewer cargoes have been shipped from the Chinese market, according to a survey by the Kiel Institute for the World Economy in Germany, which monitors ship movements in a hundred regions around the world.

The Institute predicted a 2.5% drop in Chinese exports for the month of March. It also estimated a decline for the European Union and other members of the North Atlantic Treaty Organization (NATO) in both exports and imports due to increased customs controls to enforce sanctions against Russia. In other words, with disruptions in the supply chain for inputs and other products, the post-pandemic economic recovery will inevitably be interrupted.

It should be noted that, before the pandemic, sectors such as automotive, electrical and electronic, energy, textile, and agro-industrial were experiencing significant growth. However, after the crisis caused by the pandemic, at least 70% of Brazilian industries reported a negative impact on their businesses, according to a survey by the Brazilian Institute of Geography and Statistics (IBGE). By the end of 2021, the industry was still 0.9% below pre-pandemic levels, while retail was 2.3% below the level of February 2020, indicating a clear loss of momentum in the economy, especially in the second half of last year.

Nevertheless, the Ministry of Economy announced that Brazil’s Gross Domestic Product (GDP) for 2022 will grow by 1.6%, contradicting the market’s estimate, which, according to the Focus Bulletin, foresees growth three times lower, i.e., only 0.49%, due to the war between Russia and Ukraine. Whom to believe? As you can see, in today’s world, anything is possible, even a nuclear catastrophe, depending on the foolishness of some world leaders. However, once this crisis is overcome, what we hope for is that the potential victors will work to create a fairer world. That would be a good start.

---

Liana Lourenço Martinelli, lawyer, postgraduate in Business Management and International Trade, is the Manager of Environmental, Social, and Corporate Governance (ESG) at the Fiorde Group, consisting of Fiorde International Logistics, FTA Transport, Warehouses, and Barter International Trade. Email: lianalourenco@fiorde.com.br. Website: fiorde.com.br.

Return to Blog