February 25, 2022

12:02

Marcela Leiros – Cenarium Magazine

MANAUS – Despite happening more than 10 thousand kilometers away, the conflict between Russia and Ukraine may economically impact Brazil and even the Manaus Free Trade Zone (ZFM), points economist Denisse Kassama. After Russian President Vladimir Putin announced the attack on the neighboring country, the oil barrel surpassed the $100 mark for the first time since 2014. Russia is also a major supplier of fertilizers and compost to Brazil, and by 2021, exports to the Brazilians have more than doubled.

“Russia is one of the world’s largest oil producers and a major supplier to Europe. Any compromise in supply affects international prices, because it reduces supply in an environment of growing demand. When fuel prices rise in Brazil, practically everything rises, because our logistics costs are very expensive. The increase in logistics costs and the rise of the dollar can still have an impact on the Manaus Free Trade Zone,” points out the economist.

Kassama also reminds us that Brazil, even though it is potentially self-sufficient in oil production, does not have the structure and technology to refine it, and ends up exporting crude oil and importing refined oil. This leaves the country “subject to international prices. “Besides this, this war can provoke other instabilities in the market, such as possibly a rise in the dollar and an increase in food prices, since Russia is a major producer,” she adds.

Brazil and Russia are part of Brics, a group formed by five large emerging countries, which also includes India, China and South Africa. According to the Ministry of Industry, Foreign Trade and Services, in 2021, Brazil sold a total of US$ 1.7 billion in products to Russia, equivalent to 0.6% of total exports.

On the list of the most sold items to the Russians are foods such as soybeans, chicken, meat, coffee, sugar and even peanuts. In the opposite direction, fertilizers dominate the list of products exported by Russia to Brazil – about 60% (US$ 3.5 billion) of the US$ 5.6 billion that Brazil imported from the Russians in 2021 was in fertilizers, according to official data.

Bolsonaro in Russia

President Jair Bolsonaro (PL) met last week , in Moscow, with Vladimir Putin. The meeting defied Brazilian military, a wing of Itamaraty, and pressure from the United States government by keeping the trip to the Kremlin.

After Russia began its military attack on Ukraine on Thursday, 24, the Brazilian Ministry of Foreign Relations informed that Brazil follows with “grave concern” the outbreak of military operations by the Russians against Ukrainian territory. The note was issued after much pressure from world leaders for Jair Bolsonaro’s government to position itself on the issue, but the president himself has not yet positioned himself on the matter on any social network.

In the statement sent to the press, Itamaraty states that “Brazil calls for the immediate suspension of hostilities and the beginning of negotiations leading to a diplomatic solution to the issue, based on the Minsk Agreements and taking into account the legitimate security interests of all parties involved and the protection of the civilian population.

Finally, the Brazilian government reiterated that it is a member of the United Nations Security Council and that Brazil remains engaged in multilateral discussions aiming at a peaceful solution, in line with the Brazilian diplomatic tradition and in the defense of solutions guided by the United Nations Charter and by international law, especially the principles of non-intervention, sovereignty and territorial integrity of States, and the peaceful settlement of disputes.