Trade

Brazilian footwear exports off to a bad start

Mar 18, 2024 Brazil

In the first two months of 2024, Brazil's footwear exports fell by 31.3% in volume and by 22.8% in value, as compared to the same period last year. More aggressive competition from China worries the industry

“There are instabilities and serious inflationary processes in the world’s major markets. Of course that has an impact. But I think the biggest impact is the return of a more aggressive China to the market, taking space from its international competitors, especially in Latin America”, says Haroldo Ferreira, Executive President of Abicalçados, pointing out that Latin America absorbs more than 50% of Brazil’s footwear exports.

According to the Brazilian Footwear Industries Association (Abicalçados), from January to February, the country shipped 18.38 million pairs of shoes, worth 169.66 million US dollars. These figures reflect a fall of 31.3% in volume and 22.8% in value, on a comparable basis to the first two months of 2023. In February alone, the category’s exports were down by 33.4% in volume and 22.5% in value, as compared to the same month last year.

Ferreira also highlighted the industry’s concern about the current situation in Argentina, as the United States, the main international destination for Brazilian footwear, shows less and less significant declines. “Last year, Argentina had two consecutive semesters of rising poverty rates, reaching over 40% of the population. The effects of the Argentine crisis are being felt by Brazilian footwear manufacturers”.

Main Destination Markets

In the first two months of the year, Brazil shipped 1.9 million pairs of shoes for 38.9 million US dollars to the US, its main export market. This reflects a decrease of 10.4% in volume and 3.7% in value, on a comparable basis to the same period of 2022.

As mentioned above, Argentina, which is experiencing a severe economic crisis, was the second most important destination for yellow and green footwear. From January to February, the neighbouring country imported 1.18 million pairs of shoes, worth 24.75 million US dollars, down by 29.9% in volume and 17.8% in value year-over-year.

Spain closes the top 3. The European country bought 2.93 million Brazilian pairs of shoes for 8.88 million US dollars, which reflects a decline of 33.4% in volume and 36.2% in value, as compared to the first two months of the previous year.

Outlook

Abicalçados expects Brazilian exports to perform better in the second half of the year, given the slowdown in global inflation and continued positive economic growth in markets such as the US and Europe. However, it estimates that 2024 will end with lower figures than last year.

Brazilian Footwear Industry

The World Footwear 2023 Yearbook (more information available HERE) shows that Brazil has one of the largest footwear industries in the world. But given the size of the industry, the country’s large domestic market is mainly supplied by its footwear industry.

Image Credits: Mateus Campos Felipe on Unsplash

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