Could the conflict between Israel and Palestine have an impact on Brazilian exports?
Contextualization
On Saturday, October 7, a conflict began between Israel and Palestine, a tension that has historical roots dating back to the end of the 19th century. At the beginning of October, the Palestinian Islamist group, Hamas, attacked 22 locations, launching an air attack on Israel with thousands of missions and carrying out a land invasion of Israeli communities, mainly in the southern portion of the country. The first Saturday of the month was considered the deadliest day in recent years in the dispute between the countries, with more than a thousand deaths.
This month's attacks took place, in particular, from the Gaza strip, an area historically conflictive between the Jewish and Palestinian peoples. The conflict can be identified since the end of the 19th century with the migration of Jews to the Palestine region. As a result, the Palestinian National Movement, especially, starts to consider the Jews as enemies invading their lands. As a result, with clashes between the two nations and the end of the Second World War, the United Nations (UN) proposed a division of Palestinian territory, resulting in the creation of Israel.
In 1967, during the Six-Day War, Israel occupied East Jerusalem, the West Bank, a large part of the Syrian Golan Heights, the Gaza Strip, and the Sinai Peninsula. Even though these territories are unoccupied, to this day Israel maintains its occupation of the West Bank and, in relation to the Gaza Strip, the State withdrew its troops in 2005, but still maintains air, border and coastal control, which the UN considers as Israeli occupation.
Therefore, the conflict is still very unstable and continues for many years, even with the action of international bodies such as the UN.
Relationship with the Brazilian economy
The results of the Trade Balance of the Secretariat of Foreign Trade (SECEX) for the month of September 2023 indicate exports worth US$ 28.431 billion and imports of US$ 19.527 billion, revealing a positive balance (surplus) of US$ 8.904 billion. In the year to date 2023, exports total US$253 billion, representing an increase of 0.4% compared to the same time last year, while imports decreased by 11.3%, totaling US$181.7 billion .
The optimistic scenario, with record surpluses in 2023, reinforces Brazil's growth potential, especially in the agricultural sector. However, the crisis in Palestine may raise doubts regarding future projections for the Brazilian economy. According to the Brazilian Institute of Economics (IBRE), the international scenario in the Middle East should not change Brazilian surplus projections in the short term, unlike the more immediate impact caused by the war between Russia and Ukraine through commodities, considering that Russia is the main supplier of fertilizers and fertilizers to Brazil.
The commercial relationship between Brazil and Israel or Palestine does not have a significant impact on the national economy. Israel's share represents 0.2% of Brazilian exports and 0.6% of imports, while Palestine's share is smaller, being the 153rd market for exports and 157th for imports. In relation to exports from the Brazilian agricultural sector to Israel, including meat and soy (main exported products), they should not suffer so many direct impacts. According to the managing partner of Cogo Intelligence in Agribusiness: “Brazil has stocks of fertilizers and there are no supply problems at the moment. We should also not have interruptions in exports of meat, soybeans and corn to Israel.”
What may be the point of attention in this conflict is oil, of which Brazil produces the majority, but is still dependent on some countries, importing 8% of the oil it consumes. If the conflict spreads and lasts, Brazil, like the rest of the world, could be affected, since oil is essential for transportation, which could cause a cascade effect. However, it is worth highlighting that the place from which this 8% of oil is imported is diverse, such as the United States.
Therefore, Brazil finds itself in a favorable economic scenario, even in the midst of an international conflict, it still maintains growth prospects. There should not be an immediate impact, as both countries do not have fundamental economic relations with Brazil, especially with regard to our main agribusiness products.
By Fernando Souto em 27/10/2023
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