The Importance of Primary Commodities in the Foreign Trade of Brazil in the 21st Century

Abstract

This paper aims to identify the importance of primary commodities in Brazil's foreign trade and define the commodity groups in whose exports Brazil has the highest comparative advantages. At the same time, we want to find out how these comparative advantages have changed and developed in the period from 2001 to 2020, i.e., in the period of high prices of primary commodities (2003 – 2012) and the period after until the outbreak of the global pandemic COVID-19. To achieve this goal, we used the Lafay index of international specialization using data at the four-digit level of the Harmonised System. The results of the Lafay index indicate that Brazil achieves comparative advantages, especially in exports of agricultural products, food, and some minerals. A significant comparative advantage is achieved in the soybean and iron ore commodity groups.