Maersk sees no Brazilian trade recovery till 2020
Reklam
Reklam
Reklam

Maersk sees no Brazilian trade recovery till 2020

THE head of east coast South America (ECSA) operations for Maersk Line, Antonio Dominguez, says Brazil's battered foreign trade will only recover to pre-economic-crisis levels in 2020.

09 August 2017 - 20:00 - Update: 10 August 2017 - 08:59

"There are a lot of positive signs in the Brazilian economy, but we believe we will have to wait until 2020 to see a resumption of global turnover with Brazil to pre-crisis levels before 2015," Mr Dominguez said.

Economic data from IHS Markit largely support this view, with GDP not expected to recover to a level comparable to 2014 until after 2020. While the Brazilian economy is officially out of recession, growth in the first quarter was completely unbalanced - exports grew, but private consumption, investment, and government spending declined.

IHS Markit expects a correction in the second quarter and GDP to decline 0.6 per cent before resuming growth in the third quarter. GDP will grow 0.2 per cent for the full year, according to IHS Markit.

Brazil's container trade grew 5.8 per cent year over year in the first quarter, to 1.3 million TEU, marking the second consecutive quarter of year-over-year growth after 15 straight quarters of declining container throughput.

Imports drove the first-quarter gains, rising 14 per cent to 467,000 TEU, as exports inched up 0.1 per cent to 560,000 TEU. Highlighting how far the trade is from recovery, first-quarter import volumes were still down 21 per cent from the same period in 2015, according to IHS Media.

Imports fell so dramatically last year that Brazil became a net exporter, a situation that Mr Dominguez expects will persist at least until the fourth quarter. This has combined with uneven growth of imports compared to exports to generate a container shortage.

"Some of those good signs here include our customers telling us they are confident they will grow their businesses by 20 per cent this year. On top of that, car manufacturers are optimistic and are expecting to produce between 2.4 or 2.5 million vehicles this year in Brazil, up from 2.2 million last year."

Automakers are bringing back online factories that had been shut down due to weak demand, and auto exports to Argentina are growing under the stewardship of the country's new political leaders, he said.

"Then there are the shoe manufacturers who are bringing in more raw materials as they ramp up for more production, and we are also seeing record production for various agricultural produce, especially soybeans."

Brazilian production of soybeans will grow 19 to 20 per cent year over year, and Brazil controlled 43 per cent of the international soy export market last year, according to IHS Markit.

On top of this, Brazil is now in the peak season for cotton production and a fair percentage of cotton exports are shipped out in containers, said Mr Dominguez, adding that the peak season should run until the end of September.

Brazilian beef exports, once thought imperilled by a tainted meat scandal that led a number of nations to ban Brazilian beef, have been largely unaffected. "Nearly all the restrictions were lifted within 10 days. The impact was really just the first week in April."

"Growth in various [agriculture] businesses is driving volumes higher year over year, but we must remember that this is based on very low volumes this time last year, so it will take two to three years to get back to where we were," Mr Dominguez said.

 

 

 

This news 452 hits received.

COMMENTS

  • 0 Comment
No comments added yet. Be the first to comment..
MAY INTEREST YOU x
Taiwan Navigation places US$51m order for 2 bulk carriers from Japan
Taiwan Navigation places US$51m order for 2 bulk carriers from Japan