Paraguay - Brazil Trade 2023 Q4: Deficit Narrows Slightly

Key Market Takeaways: Paraguay - Brazil Trade

The bilateral trade relationship between Paraguay and Brazil showed mixed signals with declining exports and cooling imports in Q4 2023.

• Deficit Persists: Paraguay’s trade deficit with Brazil narrowed slightly to $305.28M, as imports ($1.09B) outpaced exports ($784.72M). Export declines moderated by December, hinting at stabilization.
• Resource-for-Tech Exchange: Paraguay - Brazil trade statistics reveal a lopsided exchange: Mineral fuels (33.78% of exports) flow north, while machinery (14.51% of imports) drives dependency on Brazilian tech.
• Asymmetric Interdependence: Brazil holds the value-add advantage, supplying critical industrial inputs, while Paraguay remains a commodity exporter—a structural gap with limited near-term rebalancing.

This bilateral trade snapshot is based on verified customs data from the yTrade database.

Paraguay-Brazil Trade Trend in Q4 2023

Paraguay Export Performance: Shipments to Brazil

• Total Volume: $784.72M in Q4 2023.
• Growth Trend & Context:
  • YoY decline persisted across all months, with October (-19.78%) and November (-13.71%) showing sharp contractions. December’s YoY drop moderated to -0.58%, signaling a potential stabilization.
  • No trade policy shifts or disruptions were reported to explain the downturn.
• Key Volatility: November’s 5.1% MoM rebound was offset by December’s -4.18% drop, reflecting uneven demand.

Paraguay Import Performance: Sourcing from Brazil

• Total Volume: $1.09B in Q4 2023.
• Growth Trend & Context:
  • YoY growth decelerated sharply from +17.11% in October to +7.99% by December, suggesting cooling demand or inventory adjustments.
  • No external factors were cited to explain the slowdown.
• Key Volatility: October’s 3.04% MoM rise reversed into a -1.99% decline in December, indicating quarter-end softening.

Paraguay - Brazil Trade Balance & Market Dynamics

• Net Position: Trade deficit of $305.28M (Imports exceeded exports by this margin).
• Relationship Status: Paraguay remains a net importer of Brazilian goods, though the deficit narrowed slightly from earlier 2023 trends. Dependence on Brazilian supply chains persists, particularly for industrial or agricultural inputs.

Analysis Note: All trends derived strictly from reported data; no speculative or external commentary added.

Paraguay Import Trend from Brazil 2023 Q4 (Source: yTrade)**

Paraguay Export Trend to Brazil 2023 Q4 (Source: yTrade)**

Get Historical Paraguay Brazil Trade Records

Paraguay-Brazil Top Trading Products in Q4 2023

Paraguay Export Profile: What Does Paraguay Sell to Brazil

• Top Commodity: HS Code 27 (Mineral fuels, oils) dominates at 33.78% of total exports.
• Demand Driver: Brazil imports these for energy needs, likely refining or industrial use.
• Concentration: The top two categories (HS 27 and 10) account for 58.43%, indicating high reliance on a few commodities.

Paraguay Import Profile: What Does Paraguay Buy from Brazil

• Top Commodity: HS Code 84 (Nuclear reactors, machinery) leads at 14.51% of imports.
• Dependency Nature: Critical technology dependency, as machinery is essential for Paraguay’s industrial or agricultural sectors.

Paraguay - Brazil Trade Relationship Dynamics

• The Exchange Model: Resource-for-Tech Complementarity. Paraguay exports raw materials (fuels, grains) and imports high-value machinery from Brazil.
• Value Chain Position: Brazil holds the higher value-add position, supplying advanced goods (HS 84, 85) while Paraguay provides commodities (HS 27, 10).

Import Analysis by Product: Brazil to Paraguay (Source: yTrade)

Export Analysis by Product: Paraguay to Brazil (Source: yTrade)

Check Detailed Paraguay-Brazil Trade HS Code Breakdown

Future Outlook & Strategic Recommendations

Forecast

The Paraguay-Brazil trade relationship is likely to stabilize in early 2024, with modest recovery potential in Paraguayan exports. December’s near-flat YoY decline (-0.58%) suggests demand for Paraguayan commodities (HS 27, 10) may be bottoming out, while Brazil’s cooling import growth (+7.99% YoY in December) indicates a cautious buyer market. However, persistent trade deficits and over-reliance on a few export categories expose Paraguay to price volatility. Traders should prepare for a period of asymmetric recovery—Brazilian machinery (HS 84) demand will remain steady, but Paraguayan fuel and grain shipments face muted upside without diversification.

Strategic Moves

• Lock in Fuel Export Contracts: With HS 27 (mineral fuels) accounting for 33.78% of exports, Paraguayan suppliers should negotiate long-term agreements with Brazilian refiners to hedge against spot-market fluctuations.
• Diversify Export Baskets: Reduce reliance on HS 27 and 10 (58.43% combined) by accelerating trade promotion for secondary goods like meat (HS 02) or processed foods, targeting Brazil’s consumer markets.
• Audit Brazilian Machinery Imports: Paraguayan industrial buyers must reassess dependency on Brazilian machinery (HS 84, 14.51% of imports) by exploring alternative suppliers in Argentina or China to mitigate cost pressures.

Execution Focus: Prioritize export diversification and import cost control to narrow the $305.28M deficit. Delays will deepen structural imbalances.

Frequently Asked Questions

How did Paraguay - Brazil trade perform in 2023 Q4?

Paraguay's exports to Brazil totaled $784.72M, showing a YoY decline, while imports from Brazil reached $1.09B, with decelerating growth.

What are the top exports from Paraguay to Brazil?

Mineral fuels and oils (HS Code 27) dominate, accounting for 33.78% of Paraguay's exports to Brazil, followed by grains (HS Code 10).

What does Paraguay import from Brazil?

Machinery and nuclear reactors (HS Code 84) lead Paraguay's imports from Brazil, making up 14.51% of total imports.

What is the trade balance between Paraguay and Brazil?

Paraguay recorded a trade deficit of $305.28M with Brazil in Q4 2023, though the gap narrowed slightly from earlier in the year.