Trade

International economic context weighs on Brazilian footwear exports

Aug 14, 2023 Brazil

Falling global growth rates and high inflation continue to affect the performance of Brazilian footwear exports, which have been declining in both volume and value in the past months

According to the Brazilian Footwear Industries Association (Abicalçados), in July, 8.18 million yellow-and-green pairs were shipped abroad, generating 101 million US dollars, down by 31.3% in volume and 9.6% in value, as compared to the same month in 2022.

Overall, in the past seven months, Brazil exported 72.93 million pairs of shoes, worth 727.55 million US dollars, which reflects a decrease of 16% in volume and 4.7% in value, on a comparable basis to the first seven months of last year. Abicalçados highlights, however, that even with this setback, figures remain above pre-pandemic levels by 11.4% in volume and 28.3% in value.

In line with his previous statements, the Executive President of the Brazilian association, Haroldo Ferreira, points out that the drop in footwear exports is caused by lower dynamics in the international economy, especially in the United States - today the second main destination for the country's footwear, after being surpassed by Argentina. However, footwear manufacturers are also encountering difficulties in the neighbouring country, “especially due to difficulties in accessing the foreign exchange market and the long term for payment of imports, which reaches half a year”, he said.

Main Destination Markets

From January to July, Brazil exported 9.36 million pairs of shoes to Argentina, generating 149.5 million US dollars. These figures indicate a year-on-year fall of 8.3% in volume and an increase in value of 36.2%.

The US ranks second, having purchased 6.3 million pairs of yellow-and-green footwear for 136.32 million US dollars in the first seven months of 2023, down by 51.4% in volume and 34.6% in value from the same period of the previous year.

To France, Brazil shipped 2 million pairs of shoes between January and July, worth 36.7 million US dollars, reflecting a decline of 59% in volume and 10.3% in value, on a comparable basis to a similar period in 2022.

Brazilian Footwear Industry

Brazil possesses one of the largest footwear industries in the world, primarily concentrated in the northeast, South and southeast regions, says the World Footwear 2023 Yearbook (more information available HERE). Given the industry's scale, its sizeable domestic market is primarily supplied by its own footwear industry. Concerning international trade, in 2022, Brazilian exports experienced a significant boost to reach a new record high of over 1.3 billion dollars, with the US and several American countries ranking as its main destination markets.

Image Credits: proinde.com.br

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