Brazilian agricultural producers have returned to exporting food to Venezuela, despite the government of Jair Bolsonaro (PL) rejecting any approach to the neighboring country and even a deliberate attempt to cut diplomatic and trade relations with Caracas.
Official data from the Ministry of Economy reveal that exports have gained a new rhythm since last year, after the deep contraction in Brazil’s sales to the Venezuelan market.
Volume is still a small fraction of what Brazil exported in 2012, when flow exceeded US$5 billion. At that time, the Venezuelan market was the eighth largest target for national sales, and the contraction of exports in 2019 represented a 23-year decline.
The deep crisis in the country, the lack of credit guarantees, the sanctions imposed by the Donald Trump administration and Jair Bolsonaro’s decision not to recognize Nicolas Maduro’s government have caused values to collapse. In 2016, Brazil exported 1.6 billion USD. But in 2019, in the current Brazilian president’s first year in power, the volume dropped to just US$420 million.
From 2021, the flow took on a new rhythm. Last year, Brazil once again exported over $1 billion to the Venezuelan market. By 2022, this amount needs to be greatly exceeded. By June, the country had exported more than US$713 million.
It was food and agricultural products that drove the rise. Brazilian soybean oil sales rose from just US$29 million at the beginning of Bolsonaro’s administration to US$189 million last year. More than $120 million had been sold by July.
During the same period, food preparations increased from US$4 million to US$75 million, while meat sausages went from a non-existent export to US$54 million.
One of the best examples of the return of trade with Maduro is the sugar affair. Sales reached US$120 million before the Bolsonaro government. But they’re down to just $19 million. They reached US$48 million in just seven months.
There were impressive leaps in the trade of corn, margarine and even Brazilian biscuits.
Imports of Venezuelan products to Brazil also increased significantly. But they are at levels far below Brazilian sales. In 2016, Venezuelans exported 415 million US dollars to the Brazilian market. This volume fell to just US$80 million in the first year of Bolsonaro’s government. But by July it is already at US$176 million and could return to 2016 levels.
Diplomatic break and end of economic collapse
The new peak in Brazilian sales comes after years of continuous attacks by Bolsonarism against Maduro, who has been accused by the UN of setting up a real repression plan against the opposition. He ceased to recognize the Brasília government, withdrew diplomats from Caracas and began using it.
Knowing the real data on the Venezuelan economy is a challenge for international institutions. Most of the information ceased to be published by the Maduro government in 2019, when the economy collapsed by 24%. In his speech to Congress this year, he stated that the country grew 4% in 2021, with an expansion rate of 7% in the first quarter. Today, in the face of the war in Ukraine, Venezuelan oil is once again accepted by the Western powers.
If approved, 2021 will be the first country to see the expansion of the local economy in eight years. However, some international estimates show that the country lost 75% of its GDP during this period.
For example, Credit Suisse estimates that the Venezuelan economy could grow 4.5% in 2022, largely driven by oil revenues. Hyperinflation also showed signs of slowing down. After reaching 3,000% per year, it would be 686% in 2021.
source: Noticias
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