Trade

Argentina surpasses the US as the main destination for Brazilian footwear

Oct 16, 2023 Brazil

In a year when Brazilian footwear exports slowed down due to the difficult international economic context, Argentina surpassed the US as the main destination for yellow and green footwear

Data compiled by the Brazilian Footwear Industries Association (Abicalçados) shows that in the first nine months of 2023, the country shipped 90.63 million pairs of shoes, generating 907.17 million US dollars. These figures reflect a fall of 16% in volume and 8.4% in value, on a comparable basis to the same period of last year. When compared to pre-pandemic levels, footwear exports grew by 6.1% in volume and 23.7% in value.

“Footwear exports have been falling since the beginning of the year due to macroeconomic factors and also because last year’s base was very strong, so there’s nothing new. Last year, it’s worth remembering, we had the best result for footwear exports in the last 12 years”, commented Abicalçados’ Executive President, Haroldo Ferreira. “In 2023, factors such as China’s strong return to the market (…), the normalisation of freight prices, the slowdown in the world economy, especially that of our main destination (the United States) and the rise in inflation hurt our performance”, he summed up.

In fact, Argentina overtook the US as the main destination for Brazilian footwear. Between January and September, the neighbouring country purchased 11.8 million pairs of shoes, worth 185.36 million US dollars, down by 11.7% in volume and up by 27.6% in value, as compared to a similar period of 2022. “Argentina, despite all its problems, such as the payment blockade and the serious internal economic crisis, is a key market for Brazilian footwear”, considers Ferreira.

In turn, Brazil exported 7.9 million pairs of shoes to the US in the first nine months of 2023, generating 174 million US dollars, which reflects a decline of 48.4% in volume and 35.7% in value, on a comparable basis to the same period of the previous year. “Faced with an inflationary crisis, US consumers have been consuming fewer shoes. In addition, Brazil, which has a 1% share of the market, has been losing ground to the Asians”, said the Brazilian Association.

France ranked third as the main destination for yellow and green footwear. At the end of September, the country shipped 2.23 million pairs of shoes, worth 42 million euros, down by 57.8% in volume and by 14% in value, as compared to the first nine months of 2022.

Outlook

According to Abicalçados’ Market Intelligence Coordinator, Priscila Linck, footwear production is expected to increase between 1% and 1.7% up to about 860 million pairs of shoes in 2023, as compared to the prior year, and between 1.5% and 2.8% in 2024 to around 870 million pairs of shoes. This growth will be mainly driven by the domestic market.

“Growth in domestic consumption is expected between 3% and 3.4%, while exports should fall by around 9%. For 2024, the slowdown in foreign markets is expected to continue, so growth will depend, as in 2023, on the Brazilian domestic market. In 2024, domestic consumption is expected to grow between 2.6% and 3.1%, while the performance of exports will be more unstable, with a range from a fall of 4.7% and an increase of 0.9%”, she furthered.

Brazilian Footwear Industry

Brazil has one of the largest footwear industries in the world, primarily concentrated in the Northeast, South and Southeast regions. But given the industry’s scale, the country’s sizeable domestic market is primarily supplied by its own footwear industry, indicates the World Footwear 2023 Yearbook (more information available HERE). However, in 2022, Brazilian exports experienced a significant boost to reach a new record high of over 1.3 billion dollars.

Image Credits: Raphael Nogueira on Unsplash

Argentina Brazil United States Exports Footwear International Trade Shoes