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Top 5 Exports: Brazil


Iron ore, crude oil, soybeans, sugar, and poultry top the list of Brazil's biggest exports.

MINYANVILLE ORIGINAL Over the past two decades, Brazil's GDP has grown sixfold, from $427 million in 1992 to $2.4 billion in 2011 -- the year Brazil surpassed the UK to become the sixth largest economy in the world. This is in part thanks to record-breaking agricultural and oil exports, which helped cement Brazil's status as a net creditor in 2008.

From 2009 through 2011, the value of total exports from Brazil increased 67% to $256 billion, according to The United Nation's Trade Statistics Branch. This boost can be largely credited to Brazil's largest export: iron ore.

Iron Ore

Brazil is the third largest producer of iron ore in the world, behind China and Australia, at 390 million metric tons in 2011. Brazil's iron ore exports have jumped 216% to $41.8 billion in the past three years, and the Latin American leader is seconded only by Australia in iron ore exports -- each are accountable for one-third of global exports. Both countries were recently joined in the top three by South Africa, which surpassed India in iron ore exports earlier this year.

The world's largest producer of iron ore is Brazil's Vale S.A. (VALE). Vale had been Brazil's single largest exporter of any commodity, not just iron ore, until it was eclipsed in the first half of 2012 by state-owned oil producer Petrobras (PBR) as the country's largest commodity exporter.

More exports do not automatically equate to higher revenues. Over the same period, iron ore exports dipped 19% in value, as reported by Brazilian newspaper Folha, the first decline in a decade. Chinese spot prices for iron ore have dropped nearly a third since June, which has led miners like Vale, Rio Tinto Ltd. (RIO) and Australian heavyweight BHP Billiton (BHP), to consider shuttering some major mining operations. China consumes 60% of the world's iron ore, but its slowing economy, in addition to the European debt crisis, are believed to be the driver of this year's collapse in iron-ore prices.

However, a turnaround is expected, particularly in Brazil, where iron-ore quality is far better than competitors in Australia, India and China. As reported by Reuters, Vale's iron ore chief, Jose Carlos Martins, believes that spot iron ore prices will reach $120 by October, and that Chinese producers will favor Brazilian imports.

Crude Oil

Iron ore isn't the only commodity that Brazil has in abundance. In 2011, Brazil was the world's 13th largest oil producer. They're expected to reach sixth largest by 2020, according to The Economist, thanks to the enormous amount of 'pre-salt' oil they possesses. Unlike iron ore, the crude oil boom is relatively new.

BG Group (BG) discovered the Lula oil field off the coast of Brazil in 2006. The single discovery transformed Brazil's prospects for wealth creation, as its proven and probable reserves jumped 150% to 50 billion barrels. Then-president Luiz Inácio Lula da Silva (who is the well's namesake) was quoted at the time calling the find a "second independence for Brazil," as its potential for wealth creation is huge.
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