Brazil, officially known as the Federative Republic of Brazil, is the largest country of South America, and the fifth largest country in the world. Its population is over 200 million. The country is surrounded by the Atlantic Ocean on the eastern side, and has a large coastline of more than 7400 kilometers, making it a perfect spot for tourism, thanks to its beaches.
Brazil has common borders with all South American countries, with the exceptions of Chile and Ecuador. The country had been under Portuguese rule from 1500 to 1822, which is why Portuguese is the official language of Brazil, and not Spanish, unlike most countries’ in the South American subcontinent.
The economy of Brazil
Brazil is a federal presidential constitutional republic and its current constitution has been in effect since 1988. Thanks to its large population and strong foreign direct investment inflow, Brazil’s growth potential is extremely high. This is why it became one of the BRIC countries alongside Russia, India, and China, all emerging countries that stand out with their development worldwide, and are expected to compete with the US in economic importance on a global scale.
In Brazil, domestic and foreign companies receive equal treatment, and labor costs are considered low. On the other hand, tax rates are considered high.
In March 1991, Brazil, Argentina, Paraguay and Uruguay gathered to sign the so-called Treaty of Asunción and create the Southern Common Market (MERCOSUL) in order to expand their economies. The main objective of this South American trade bloc was to construct an economic, political and social consolidation among their members, and collaborate in order to reduce the asymmetries among themselves. As of now, all South American countries are part of this bloc, either as full members or associate countries (the only suspended state is Venezuela). If MERCOSUL were a country, it would be the fifth largest economy in the world, with a GDP of $3.2 billion.
Exports, imports and resources
In the colonial era, the principal export products of Brazil had been sugar and cotton, and then in the 19th century, the list became bigger with the addition of hides, rubber, and coffee. By 1900, Brazil accounted for more than half of the world’s coffee production, and in the 1920s, coffee still made up 75% of Brazil’s export trade. Over the past decade, Brazil has expanded its economy to other types of goods, such as vehicles, textiles, footwear, steel, and soybeans.
In addition to these, Brazil’s main exports include agricultural and mining products. In fact, the country has around one-third of the world’s iron ore reserves, hence it is the second largest exporter of this resource in the world. The first place is taken by Australia, with 50%, followed by Brazil’s 22%.
The main destinations of Brazil’s exports are China (18%) and the US (12%). At the same time, these countries are the main sources of Brazil’s imports, with 16% and 15%.
Brazil’s principal imports from Portugal consist of the following products: olive oil (20%), petroleum (12%), aircraft parts (7.2%), apples (4.7%), frozen fish (4.5%), industrial ovens (3.6%) and wine (3.4%).
Besides these, there are other products Portuguese companies might have a good chance with, when it comes to exportation to Brazil. At the top of the list of Brazil’s imports from China and the US is machinery. This product group also makes up the biggest part of Portuguese exports, with products such as telephones, integrated circuits, gas turbines, valves, transmitters, digital disc drives, electric motors, etc.
Other goods with export potential to Brazil are metals, plastic/rubber and textiles, since these products represent 6%, 5.6% and 3.2% of the imports of Brazil. These product categories are well-known to the Portuguese, and it is not by chance:
- Textiles are No. 3 among the most widely exported products of Portugal, representing 10% of Portuguese exports;
- Metals rank at No. 5 among the most widely exported products of Portugal, representing 7.6% of exportation;
- Plastic/Rubber are No. 6 among the most widely exported products, representing 6.8% of our exports.
Do you want to export to Brazil? Download our free "Basic Exporter's Guide" to know what steps to take!
Francisco Martins is currently working in the Export Operations Team of Multicargo, his tasks involve the control of sea exportation of full containers (FCL), and he is in daily contact with several shipping companies and a vast network of international agents that Multicargo has at its disposal. He has been at Multicargo since June 2015.
