Oil export boom pushes Brazil's October trade surplus above forecasts

what happened

Brazil's trade surplus in October beat forecasts, according to official data released on Friday. The Ministry of Development, Industry, Trade and Services put the surplus at $9.3 billion, compared with the $9.1 billion analysts had expected in a Reuters poll. Exports rose 20% from a year earlier to $37.8 billion, while imports climbed 14.8% to $28.5 billion.

Crude oil was the standout. Its exports soared 122.6% to $8.5 billion, making it the biggest contributor to export growth for the month. Fuel exports jumped 164.5% to $1.8 billion. The ministry's trade statistics director, Herlon Brandao, said the month saw "the largest monthly trade flow on record, with both exports and imports reaching all-time highs."

Year to date, the surplus has widened 34.1% to $71.0 billion.

why it matters

Higher commodity prices and rising oil and fuel export volumes bring more foreign currency into Brazil, which supports the real. As Latin America's largest economy leans heavily on energy shipments, the trend in oil exports feeds into the country's external balance and the outlook for its commodity sector. Volatility in global energy markets remains a source of uncertainty.

market impact

Real: a wider surplus and oil export growth support the currency, pressure in favour of BRL

• ▲Brazilian real (BRL) pressure up — foreign currency inflows from oil and fuel exports

tags

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