Minerals can displace soybeans in exports to China – 02/06/2023 – Market

Brazil should expand its export basket to China by 2030, with the potential to increase sales of 216 products identified as opportunities by 76%.

This diversification will still be modest and concentrated in commodities from the extractive sector and agriculture, but advances are expected in sales of items such as pharmaceuticals, chemicals, machinery, electrical materials and wood.

The conclusions are part of the study “Exports from Brazilian states to China – Current scenario and prospects for diversification”, released this Tuesday (7) by the Brazil-China Business Council.

In this scenario, ores should displace soybeans as the main commodity sold to Brazil’s largest trading partner. The Southeast and North regions would be the main beneficiaries of the movement, accounting for 70% of this increase.

According to international trade specialist Fabrizio Panzini, author of the work, growth in exports to China by 2030 for products identified as opportunities represents an increase of US$ 44.5 billion. The value is equivalent to almost 50% of exports from Brazil to China in 2022.

Of this total, 60% would come from three states: Pará, Minas Gerais and Rio de Janeiro. But other states should also benefit from the movement — among them, São Paulo.

“In the last decade there was an extraordinary growth in exports from all regions of Brazil to China, much higher than the increase to other places in the world, but this growth was accompanied by a concentration in some products”, says Panzini.

“It is desirable and possible to seek diversification. The beginning of this will happen with products close to those we sell today. It is difficult to make a radical change in the agenda. It is not overnight that you will gain so much in added value .”

The study points to the possibility of expanding the share of products that have less participation in the basket from 28.1%, in the annual average of 2017-2020, to 31.8% in 2030. Ten products accounted for 91% of sales to the Asian country on average for the period.

When considering the weight in the export basket, the highlight until the end of the decade should be the minerals sector, with an expansion in the share of sales from 24% in the 2017-2020 average to 32% in 2030. The share of seeds and fruits oilseeds would fall from 37% to 28%, taking second place.

Iron ore tends to maintain its preponderance, but others, such as copper, manganese and niobium should see more expressive percentage increases, says the expert.

The products currently leading the list, such as soybeans, iron ore and crude oil, should remain the most relevant, due to the market already conquered in China and the magnitude of their sales values. But even in these sectors, there are opportunities for diversification, according to the study.

China’s share in Brazil’s exports increased from 17% in 2012 to 31% in 2021. By region, this percentage of dependence varies from 20% in the Southeast to 53% in the North.

For 22 states, the participation of the Asian country as an export destination increased in the analyzed period. For 19, China was the most relevant destination in 2021.