Restrictions imposed in the country because of Covid-19 delay negotiations and shipments of inputs to Brazil.

China is Mato Grosso do Sul's main trading partner. The Asian country is the destination of almost 50% of the products sent abroad from MS. With the advance of the pandemic and the restrictions imposed in the country, the State is also feeling the consequences of market instability.

In addition to the impact on commodity exports, economic analysts point out that the main damage is the reduction in imports. With lower supply and higher demand, the result is rising inflation and higher consumer prices.

Mato Grosso do Sul exported US$ 1.219 billion to the Asian destination between January and April, which represents 48.12% of all production exported by the State. In the same period in 2021, China's share was 49.10%.

“It is the main destination for exports from Mato Grosso do Sul, and so far we have not seen restrictions (on MS products). What has been happening is delays in shipment and return”, points out the Secretary for the Environment, Economic Development, Production and Family Agriculture (Semagro), Jaime Verruck, to Correio do Estado.

In addition to inputs and industrialized products that come from the Asian country, the State exports soy, meat and cellulose.

“The issue of the lockdown has caused problems mainly in this matter of logistical structuring. It means that ships are not arriving, and it gets in the way of opening ports. Consumption does not affect directly, because people continue to consume, but they have difficulty accessing these products”, analyzes the secretary.

Among imported products, the lack of supplies for the manufacture of medicines is already evident both in the rise in prices of the product in pharmacies and in the lack of many items, such as dipyrone and amoxicillin.

The pharmaceutical industry imports 90% of the country's raw material.

“We are having difficulty purchasing supplies for medicines. The importance of China to the world market, both for imports and exports, given its size, is significant. Any move by her can harm certain economies or make those economies grow,” says Verruck.

IMPACT

This weekend, there was a reduction of restrictions imposed by the Chinese government for more than 40 days. Part of the population was able to leave the house after the period of total isolation.

A report by the Fundação Getulio Vargas (FGV) points out that the lockdown adopted by China to contain the pandemic helps to intensify inflationary pressures in the world.

“In addition to the war in Ukraine, the new lockdown in China, as a measure to contain the spread of Covid-19, has intensified the bottlenecks that had not yet been overcome in global supply chains, leading to new inflationary pressures”, points out the statement. document.

The impact for Mato Grosso do Sul and for Brazil as a whole is much greater in the increase in prices of products of Chinese origin.

Data from the Brazilian Foreign Trade Association (AEB) indicate that in April import prices, in dollars, rose 34.4%, with a 6.9% decline in quantities. In March, prices had already increased by 29.5%.

According to economist Lívio Ribeiro, from the Brazilian Institute of Economics at Fundação Getulio Vargas (Ibre/FGV), the new lockdowns in China and the damage caused by the war between Ukraine and Russia should keep inflation high for longer.

“If before we had doubts that the process of reorganization of the productive chains would be completed this year, today it seems very unlikely that this will happen”, he said in an interview with Estadão.

The impact for the consumer remains great. China has not stopped importing soybeans, for example, which is why the price of soybean oil does not have a downward trend.

In the case of beef and poultry, there was a reduction in imports, however, for the consumer, the bill was not lower.

The owner of Semagro points out that today the disabling of Brazilian refrigerators is what most worries the State.

Since the beginning of the “Covid-19 zero” policy in China, the country has already announced temporary suspensions of exports from at least six Brazilian meatpackers. None of them located in MS.

“We are always worried, I don't know if it's because of the lockdown or the market, it's about the disqualification of slaughterhouses in the meat market. This has harmed Brazilian livestock. So this instability and disqualification of plants has created a bad situation”.

“We see that the market has taken attitudes that have mainly harmed the export of beef and chicken to China”, concludes Verruck.

Source: www.correiodoestado.com.br