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Top 5 Exports: Brazil

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

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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.
No positions in stocks mentioned.
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