21 October 2011
Houston, so far this year, is the top US. Customs district trading with Brazil, beating historic No. 1 Miami, though imports and spiking oil prices are the biggest drivers of that growth.
Through August, two-way trade between Houston and Brazil rose to $10.37 billion, 41.62 percent above trade between the two through August 2010. Trade between the Miami Customs district and Brazil rose 11.09 percent to $9.62 billion.
The Miami district, which stretches from Port St. Lucie to the Florida Keys, has been the leading gateway for trade with Brazil since at least 1992. The district posted a record $13.39 billion of trade with the country in 2010 while Houston’s trade, also a record, was worth $11.3 billion.
Houston's trade overtook Miami early this year, and by the end of February was worth $2.31 billion while Miami trailed at $2.21 billion. It has since held that lead, which in August was worth $750 million.
Both districts are trading with Brazil at a surplus so far this year. Houston’s is valued at $1.49 billion while Miami’s is worth $7.77 billion. Outside of Houston and Miami, New Orleans, New York City, Jacksonville and Norfolk all have posted more than $2 billion worth of trade with Brazil through August 2011.
Miami’s huge surplus is mostly thanks to technology exports to Brazil. The top five outbound shipments through August include aircraft, valued at $2.33 billion; computer chips, valued at $756.03 million; computers, valued at $512.91 million; landline and cell phone equipment, valued at $516.29 million; and computer parts, valued at $390.38 million.
Houston’s exports to Brazil echo the district’s importance in the nation’s energy infrastructure. Refined oil, so far this year, is the district’s No. 1 export worth $1.25 billion. Other top exports are byproducts of the refining process and inclue polymers of ethylene, petroleum gases and cyclic hydrocarbons.
On the import side, crude oil was the Houston Customs district’s No. 1 import, worth $2.81 billion. The price of crude oil rose above $114 per barrel earlier this year, according to the U.S. Energy Information Administration, and is likely behind the surge in the value of Houston’s trade with Brazil.
Yet it’s unclear whether a real leader for trade with Brazil will arise anytime soon.
“Miami has been dealt a winning hand for non-oil imports and exports” to Brazil, said Jerry Haar, associate dean at Florida International University’s College of Business and director of the Pino Entrepreneurship Center. “Houston has been dealt a winning hand for oil.”
The U.S. will continue to import oil from Brazil, he added, because the country is already self-sufficient and “now with deep water finds and the technology that’s used to increase the efficiency, and large ships that can go through the Panama Canal Brazil is sitting pretty.”
Despite Brazil’s growth, the attention and investments it’s received in recent years won’t last for long, according to Haar.
“My outlook for Brazil is negative after 2016. You cannot show me one Olympic stadium in the world that after (the event) is able to generate positive cash flow and Brazil has the double whammy of the World Cup and Olympics,” he said. “Notes will come due on those bonds several years after that event and we don’t know whether it’s going to (be) a hard or soft landing.”
For more information about how Miami and the U.S. trade with Brazil and the world visit US TradeNumbers.