Revenue from Russia’s exports to Brazil has doubled since the start of the war

Revenue from the flow of exports from Russia to Brazil has expanded strongly since the beginning of the war in Ukraine, reflecting both the rise in prices of goods purchased by the Brazilian market and the move to anticipate fertilizer imports to secure supply. domestic market..

Under heavy embargo and sanctions, Russia began to see its trade interrupted in some of the main western markets. But booms in commodity and energy prices allowed revenue from Russian sales to grow exponentially.

In the eurozone, Russia’s sales totaled 31 billion euros between January and March 2021. In the same period of 2022, Russia’s exports increased by more than 104% to reach 63 billion Euros.

In the case of Brazil, official data from the Brazilian government point to a similar move, although it is not the center of energy imports. According to the official data of the Ministry of Economy, Brazil imported 485 million US dollars from Russia in February. In the following month, the value has already risen to $565 million. But the jump was even bigger in April, with US$804 million in flows and the highest bilateral trade volume in at least six years.

Russian fertilizers represent more than 20% of the national supply of the product, and imports from Moscow are considered strategic for fields such as soybeans.

Diplomatic sources in Brazil have announced that there is an agreement, including the US government, that fertilizers will not be included in the list of embargoed products. But the difficulty of importing is important. While banks refuse to issue loans or raise prices for operations, some major ports used in the Baltic Sea countries no longer allow Russian shipments. The result is a more expensive operation.

Brazil does not impose sanctions, but trade collapses

But if Brazil is paying more for Russian products today, domestic sales to the Russian market have fallen since the beginning of the war. In February, Brazil exported US$ 250 million worth of products to Russia, mostly in the agricultural sector. Volume fell to $172 million in March and the rate was just $91 million in April, one of the worst months in six years.

One of the main problems is the absence of Brazilian companies engaged in maritime transport. Therefore, national products are dependent on international companies that do not want to be subject to sanctions.

During the period when the measures against Russia were taken, only one of these companies was transporting 800 containers of Brazilian agricultural products worth 60 million USD to Moscow. However, he left these goods in different ports of the world in order not to deliver them to the Russian market.

João Santos Lima, from SL Trading and specializing in fruit trade to Russia, pointed out that today it is almost impossible to supply national products. “Brazil does not impose sanctions. But it also suffers because it does not have its own shipping companies,” he said. “There are no sanctions, but there is no trade in a few sectors,” he said.

In the case of peanuts or meat, the freight taken to secure the supply in Russia made export impossible. According to him, if the export flow falls between February and April, the decline will be even greater in the coming months if the war continues.

Not coincidentally, Brazil insisted on pointing out that sanctions affecting agriculture in different international organizations could have a global impact and re-ignite the world hunger debate. For example, at the WTO, Itamaraty made a proposal to create food and fertilizer corridors.