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February 7, 2017

Mato Grosso Contributed 25% of Brazil's Balance of Trade Surplus

The state of Mato Grosso is Brazil's leading agricultural export state and according to a recent report in the newspaper Diario de Cuiaba, Mato Grosso contributed 25% of Brazil's balance of trade surplus in 2016, which is the difference between the country's exports and imports. The only other state that contributed more toward the balance of trade surplus in 2016 was Minas Gerais.

In 2016, Brazil had a balance of trade surplus of US$ 47.6 billion with US$ 11.4 billion coming from the state of Mato Grosso. The state's main exports consist of soybeans, corn, meat, and cotton. In fact, the soybean complex (soybeans, soybean meal, and soybean oil) accounted for 60.8% of the state's total exports. The state's imports are relatively small compared to its exports, which allows for a hefty balance of trade surplus.

The state maintained its second place position even though the volume of exports fell 3.7% in 2016 due to reduced production of soybeans and corn. Hot and dry weather during December and January resulted in lower soybean yields and an early end to the rainy season in April resulted in lower safrinha corn yields.

In addition to lower export volumes, the exchange rate between the Brazilian real and the U.S. dollar contributed to a decline in the overall value of the state's exports. In December of 2016, the average value of the Brazilian currency was 3.35 Brazilian reals per U.S. dollar. This represents a strengthening of 13.4% compared to a year earlier when in December of 2015, the value of the Brazilian currency was 3.87 Brazilian reals per U.S. dollar. As a result of the combination of a 3.7% reduction in volume of exports and a 13.4% increase in the value of the Brazilian currency, the total value of the exports from Mato Grosso in 2016 declined 17%.

In total value of exports, Mato Grosso ranks in sixth place behind the states of Sao Paulo, Minas Gerais, Rio de Janeiro, Rio Grande do Sul, and Parana.