Brazil’s chemical imports relentless growth pushes 2023 deficit to $47.0bn

SAO PAULO (ICIS)–Brazilian companies imported in 2023 chemicals worth $61.2bn, the second-highest figure for nearly 35 years, pushing the sector’s trade deficit to $46.6bn, chemicals trade group Abiquim said on Monday.

Only in 2022 chemicals imports stood higher than last year, at $80.3bn. During that year, the trade deficit also stood higher than 2023’s at 63.0bn.

Abiquim only represents Brazilian chemicals producers, the industry’s arm most affected by high levels of cheaper imports. The trade group does not represent distributors, who have benefitted from cheaper overseas product.

Abiquim continues to advocate for deeper protectionist measures, although even on Monday’s 2023 trade balance figures the trade could see a very small silver lining .

“It is important to highlight those physical quantities imported increased by 2.3% compared to 2022, totaling 58.6m tonnes. In other words, the monetary value imported in 2023 was not higher than 2022’s record because imported prices fell by 25.5%, the result of an international economic shock driven by a particularly challenging global geopolitical moment,” said Abiquim.

In 2023, plasticizers imports posted the highest increase at 55.4%, followed by thermoplastic resins (up 13.8%) and their intermediates (up 4.7%), basic petrochemicals (up 13.8%), chemical intermediates for detergents (up 4.1%), among other various chemical products for industrial use (up 10.9%).

Asia continued to be the main supplier of chemicals to Brazil, with 29% of the total or $17.7bn.

EXPORTS DOWN NEARLY 16%
As imports continued strong in 2023, exports invariably suffered, falling 15.6% year on year, with their value at $14.6bn.

The $46.6bn trade deficit is the result of resting the value of exports from the imports.

Brazil’s chemicals, thus, continue to be missing out on Brazil’s trade balance bonanza, which has been mostly fueled by healthy grain harvests and record levels of exports as Brazil has become one of the world’s breadbaskets.

Chemicals and the wider manufacturing, however, continued to suffer from lackluster activity in many Latin American economies, not least Argentina’s, Brazil’s main trading partner in the region.

“We need to intensify support for the chemical industry with tax incentive mechanisms for expanding production and investment to bring us closer to what is being done in the world, especially in the US and China,” said Abiquim’s executive president, Andre Passos.

“We also need to defend, with commercial policy, the Brazilian chemical industry – which is more sustainable and therefore has higher costs – from unfair competition that uses raw materials, energy and dirtier (and therefore cheaper) industrial processes, especially with emergency tariff and carbon mitigation measures at the border.”