Sao Paulo, Brazil, 3 Feb – Brazilian exports of soy, iron ore and oil to China are expected to fall 12 percent to US$11.2 billion in 2009, according to a forecast from the Brazil-China Council published in Sao Paulo.

These products account for 77 percent of Brazilian exports to China and projections point to a drop of 19.4 percent for soy, 46.4 percent for oil and a rise of 13.7 percent for iron ore.

The council has based its projections on exports being affected by a fall in price alone, because volume of soy and oil is expected to remain unchanged, whilst that of iron ore may rise 10 percent thanks to a Chinese fiscal stimulus package.

This scenario is considered to be optimistic by other analysts contacted by Brazilian newspaper Valor Económico, for whom the fall in exports to China will be even more significant.

Bilateral trade will inevitably fall. We are going to face a substantial reduction in value with the fall in prices of raw materials, but volume is unlikely to be affected,” said Rordigo Tavares Maciel, executive-secretary of the Brazil-China Council.

Maurício Moreira Mesquita, an economist with Banco Interamericano de Desenvolvimento, disagreed and said that the trend is for exports from Brazil to China to fall, not only in terms of price but also volume.

“If deceleration of the Chinese economy gets worse, the impact for Latin America will be severe,” he said.

Brazilian exports of soy to China rose from US$1.3 billion in 2003 to US$5.3 billion in 2008 and those of iron ore rose from US$765 million to US$4.9 billion in the same period.

Oil – which in 2003 was not even on the list of main products exported to China in 2003 – brought in US$1.7 billion in revenue for Brazil in 2008. (macauhub).