Itaú BBA - Trade balance: Oil rig export ensures a better-than-expected trade surplus in November

Macro Brazil

< Back

Trade balance: Oil rig export ensures a better-than-expected trade surplus in November

December 1, 2016

The November trade surplus was better than expected due to the export of an oil-drilling rig in the end of the month

The trade surplus reached $4.8 billion in November, beating our expectation ($ 2.8 billion) and market consensus ($ 3.0 billion). The surprise was driven by an oil-drilling rig export (valued at $1.9 billion). Exports totaled $ 16.2 billion, rising 13.5% mom/sa. At $11.5 billion, imports fell 3.6% mom/sa. Compared to November 2015, exports climbed 17.5% yoy, but imports dropped 9.1% yoy.

This was the biggest monthly result ever for November. The year-to-date trade surplus reached $43.3 billion, also the highest reading in the historical series (started in 1992). Over 12 months, the trade surplus advanced to $49.5 billion. The seasonally-adjusted annualized quarterly moving average increased to $48 billion. 

Exports increased 17.5% yoy, adjusting for the number of working days. The decline in exports of basic items (-5.5%) was offset by sharp increases in sales of manufactured products (41.8%) and semi-manufactured goods (21.3%). On a seasonally-adjusted monthly basis, exports went up by 13.5%, with broad-based gains in basic goods (2.6%), manufactured products (a noteworthy hike of 37.6%) and semi-manufactured products (7.0%). As for manufactured items, a pro-forma export of an oil-drilling rig (valued at $1.9 billion) inflated exports in November. However, even excluding this atypical transaction, manufactured exports climbed 6.7% mom/sa.  

Imports continued to decline in year-over-year terms: total imports dropped 9.1% yoy, adjusting for the number of working days. Imports ex-fuel continued on a downward trend, falling 2.8% yoy, dragged by capital goods (-22.4%) and durable consumer goods (-3.8%). On a seasonally-adjusted monthly basis, total imports decreased 3.6%, due to lower purchases of capital goods (-8.8%), intermediate goods (-0.4%) and fuels (-2.1%). Imports remain at historically-low levels. 

The November trade balance was better than expected due to the pro-forma export of an oil-drilling rig in the end of the month. Notwithstanding a positive surprise, we maintain our forecast of a $47 billion surplus in 2016. We expect slightly smaller surpluses in the following years. The trade balance will continue to be the main driver behind lower current account deficits than in recent years.


 

Julia Gottlieb


 

 



< Back