Brazil strengthens its trade with Russia despite the war in Ukraine and Western sanctions

Brazil, the largest economy in Latin America, has increased its imports from Russia, with which maintains a solid business despite the war in Ukraine and at a time when the West is trying to isolate the government of Vladimir Putin.

Beyond the enormous logistical difficulties, the bilateral trade flow has barely suffered since Russian troops invaded Ukraine on February 24, according to data from the Brazilian Ministry of Economy. Quite the opposite.

In a phase of growth since 2021, Russian imports totaled $ 3,237 million between March and June, more than double the value recorded in the same months last year ($ 1,572 million).

Brazilian exports fell by only 10% in the same comparison (521 versus $ 577 million), amid the siege of sanctions against Russia.

Russian diesel

This week the government of Jair Bolsonaro, which defends a “neutral” position in the face of the conflict, announced that it has “almost closed” an agreement to buy Russian diesel “as much as possible”.

“We are looking for safe and very reliable diesel suppliers, and Russia is one of them,” Brazilian Foreign Minister Carlos França told UN headquarters, distancing himself from the United States and the European Union, which have imposed gradual embargoes. on oil. Russian.

International trade experts consulted by the EFE agency reject these agreements as a gesture of “political support” for Putin.

“Brazil, after all, pursues its own interests,” said Victor do Prado, senior member of the Nucleus of International Trade and Global Economy at the Brazilian Center for International Relations (Cebri).

Although Professor Edmar Almeida, of the Institute for Energy of the Pontifical Catholic University of Rio de Janeiro (PUC-Rio), appreciates “a diplomatic effort” by the Bolsonaro administration to “Russia sell its products to Brazilian companies” .

fertilizers

The main product of Russian imports is chemical fertilizers, keys to the powerful Brazilian agricultural industry. In the first half of this year they responded with 77

Russia is the main fertilizer supplier to Brazil. A quarter of what he consumes comes from there.

For Rodrigo Cezar, professor at the school of international relations of the Getulio Vargas Foundation (FGV), what Brazil has done is “anticipate exports for fear that Russia will not be able to continue to supply”.

This increase in demand, coupled with logistical problems, has caused the price to skyrocket, impacting the trade balance, according to Cezar.

Additionally, Prado, who held executive positions in the World Trade Organization (WTO), recalls that this growth dates back to before the war, coinciding with the expansion of the Brazilian countryside, which has also increased purchases of fertilizers from other producers, such as Morocco.

As for exports, Brazil mainly sold soybeans (37% of the total) and sugar (21%) to Russia in the first half of the year, without sales collapsing due to the war.

The burden of sanctions

Keeping the flow isn’t proving easy. Sanctions have made international payments to Russian banks extremely difficult.

One of the solutions was to get them through the branches that “many Russian companies” have in countries like “Kazakhstan, Turkey, China and India,” according to Gilmar Menezes, executive director of the Chamber of Commerce, Industry and Tourism. .

Furthermore, unlike the Western powers, The Bolsonaro Executive has not adopted – nor supported – sanctions against Russia, its partner in the BRICS group (Brazil, Russia, India, China and South Africa).

“Brazil has no tradition of imposing sanctions. If there is a business opportunity, it does,” Cezar says.

And now … diesel

Within this apparent bilateral fluidity, Brazil, which occupies a temporary seat on the UN Security Council, andhopes to start receiving Russian diesel in a maximum of “60 days”, according to Bolsonaro, who highlighted the need to buy from those who “sell the least expensive”.

“Russia continues to do business with the whole world, it seems that the economic sanctions have not worked,” said the far-right leader, who in February, on the eve of the war, visited Putin in Moscow, with whom he also spoke by phone on March 27. June.

But this latest movement in relation to diesel has surprised some analysts since great difficulty that his transfer from Russia will entail.

Brazil, which imports nearly a third of the diesel it consumes, has reserves for 50 days, according to official calculations that add to the warnings for the risk of shortage in the second half, when the country will hold elections, in which Bolsonaro will try to renew his mandate. .

Source: EFE

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