Exports in 2021: the prospects for different markets

The international economic crisis, intensified by the pandemics, tends to cause significant effects to the exports in 2021 – though raw materials were declared as national priorities in 2020. However, besides the crisis, several other factors may impact on the export relations by sea between Brazil and other countries. Some of them are the specificities and volatility of each sector.

In order to better understand what to expect from different markets, we have interviewed Thiago Perry – commercial executive of Wilson Sons – and Emanuel Andrade – commercial manager. Both presented their view about the real impacts of the pandemic, export trends in Brazil and prospects for 2021. 

How has the pandemic impacted on the Brazilian exports?

Even though the importance of the domestic market has not changed, mainly due to the prioritization of raw materials from the Government’s side, there was indeed an impact – which will be observed in 2021. And not only in 2021, once the signs indicate that the pandemic will continue affecting the markets around the world.

The positive aspect in the domestic economy is that some benefits were seen in 2021. Out of them, the increase of meat negotiations, the resumption of activities of Brazilian meat processors just one month after their interdiction, and the growth in the exports of vitamin C fruits and soya products.

However, several other areas have suffered with an unstable economic scenario. A study of CNI, the Industry National Confederation, reported that 57% of the national companies reduced their exports due to the pandemic.

Despite being a remarkable information, not only the markets have suffered the impacts of the pandemic. The professionals of the export sector also felt the effects. With new personal hygienic habits, concerns about the health conditions and social distancing, the formats of working up to then had to be reviewed.

In this regard, Pierry talks about how the commercial executives and sales professionals managed to face the new reality. “We learned how to be more agile in documentation processes, communications, and in attending clients,” he explains.

Indeed, the customers service activities and prompt solution of problems gained in importance in 2020. These – and the other trends mentioned – tend to reverberate in 2021. They will reflect the lessons learned by the professionals, the attempts of recovery of different segments and the maintenance of those who did not suffer significant impacts.

What are the prospects for the Market in 2021?

Commodities such as soya tend to keep their valued position. Agroconsult, a consultant specialized in agribusiness, projected exports amounting to 83,2 million tons in 2021. In 2020, it reached 82,3 million tons.

This data indicate a tendency that strong markets, mainly in terms of exports, will maintain this status. On the other hand, segments that had formerly achieved regular growth, but had losses in the beginning of 2020, will start a movement of recovery.

According to Andrade, Brazilian exports cannot be perceived in general terms. “When it comes to commodity, the term comprehends a large number of variables. Nevertheless, in general, the agribusiness will be seen, once more, with optimism. And this is explained by the fact that Brazil’s role as the “breadbasket of the world” is well consolidated. 

And, in Pierry’s opinion, the prospects for this sector are very positive. “Closing December of 2020 with a large portion of 2020/2021 crop already negotiated for export in 2021, even before its harvest (approximately 50%), already means a good expectation for the scenario.”

He adds: “At the ports, there is a perceptible improvement and increase in activities. This leads us to hope for faster and faster crop export outflow.”  

Which will be Brazil’s top exported products?

In Andrade’s opinion, grains stand out. “Products such as soya, sugar and maize (the latter, presently under negotiations that may boost the exports to China) must maintain the upward trend”, he says. These prospects are irrespective of the growth projection and stronger presence of international competitors, such as USA (soya and maze) and India (sugar).

Another product mentioned by Andrade is the iron ore. “Iron ore is a great protagonist of our exports and indicates a projection of valuation in the international market”, he adds. Therefore, a boost of external sales is expected in its sector, if the iron mining and production keeps its acceleration.

Closing his list, he mentions the petroleum. It also suffered the volatility of 2020, in particular because of the pandemic. And it was perceived in high prices and accentuated oscillations.  Yet, according to Pinheiro, a recent projection of Petrobras indicates a positive expectation for exports.

Pierry, on the other hand, outlines the wood pulp. “It is a product that receives consistent investments. So, it will maintain a steady growth, having in mind, as well, the fact that the two leading companies in the market set up a terminal in Santos for their exports outflow”, the specialist points out.

This move tends to demand more ships, directly affecting the exports in 2021. The results, however, will be probably seen as from September, consolidating this trend in 2022.

And the less exported products?

When it comes to the less exported products, Andrade indicates the manufactured and industrialized ones. Besides the fact that the fall in exports is a tendency being observed along the years, its competitiveness keeps going down.

In spite of the points raised in this article, it is important to watch the challenges faced by the logistic chain in the export sector worldwide. In Brazil, aiming to overcome them, changes are expected in the SISCOMEX (Foreign Commerce Integrated System), in ocean freights, exports credit insurances and even in the method of calculation of Customs duties of imported goods.

These considerations demands attention to the effects (still unpredictable, despite the projections) of Covid-19 from the professionals of the export sector. In this regard, Andrade concludes: “the commodity market, as we explained, is extremely volatile. But, yet, it is the great flagship of the exports.” So, we have to wait for the developments.

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