According to a report released by the Brazilian Chemical Industry Association (Abiquim), from January to May, the imports of chemical products grew 11.8% in comparison to the same period of 2017. The amount in FOB value was US$ 15.6 billion, the largest in the last 4 years.

By the other hand, the country’s exports in the chemical sector dropped by 2%, reaching a trade deficit of US$ 10.2 billion during the first five months of 2018. In 2017, Brazil ended the year with a trade deficit of US$ 23.2 billion.

The retreat of Brazilian exports in 2018 was driven by the cancellation of a special fiscal regime adopted for the chemical industry since 2013. Abiquim evaluates this extra costs will discourage productive investments and lead to more industries going bankrupt until 2021.

Despite the opening market for imported goods, the current deindustrialization in the Brazilian chemical sector may lead to a significant reduction in the country’s imports, due to the fact that local industries are heavy buyers of chemical inputs such as urea, potassium, phosphates and other products.

The main product of Brazil’s import portfolio is chemical fertilizers and its inputs. In 2017, the country bought 28.6 million tons from international suppliers, representing an increase of 20.1% in comparison to the previous year. UAE was the 14^th largest provider with 435.1 thousand tons, two times more than what was exported in 2016.

In 2018, from January to May, UAE companies exported 155.8 thousand tons of urea fertilizers to Brazil, a 3% increase over the same period of 2017. Other main competitors in the Gulf region are Qatar, KSA, Kuwait, Oman, and Bahrain.

Source: Brazilian Chemical Industry Association (Abiquim)