February figures showed a stronger trade surplus at the margin, due to an oil drilling rig export.

The trade surplus reached $4.9 billion in February, matching our expectation and market consensus. Over 12 months, the trade surplus was stable, at $67 billion, but the seasonally-adjusted annualized quarterly moving average expanded to $69 billion from $64 billion, lifted by the pro-forma export transaction of an oil-drilling rig. Excluding this atypical transaction, this indicator showed stability in the trade surplus vs. January.

Exports totaled $17.3 billion, rising 2.4% mom/sa, while, imports were virtually stable, increasing 0.6% mom/sa to $12.4 billion. Compared to February 2017, exports increased 11.9% and imports climbed 13.7%.

Exports increased 11.9% yoy, adjusting for the number of working days. Sales of semi-manufactured goods (1.8% yoy) and manufactured items (41.6% yoy) advanced, while sales of basic items fell 7.5% yoy, as the average prices of the main commodities exported by Brazil were lower than in February 2017. On a seasonally-adjusted monthly basis, exports climbed 2.4%, as shipments of semi-manufactured and manufactured goods (with gains of 3.9% and 20% mom/sa, respectively) offset a 1.0% drop in sales of basic items. Sales of manufactured items were inflated by the pro-forma export transaction of an oil-drilling rig worth $1.5 billion. Excluding this (atypical) transaction, manufactured exports were virtually stable, rising 0.4% mom/sa.

Imports advanced again in year-over-year terms, by 13.7%, with higher purchases of capital goods (24.4% yoy), intermediate goods (11.7% yoy), consumer goods (21.3% yoy), and fuels and lubricants (7.5% yoy). On a seasonally-adjusted monthly basis, total imports increased slightly, by 0.6%, as higher purchases of capital goods and consumer goods offset falling fuel imports. Excluding fuels, imports would have risen 3.1% mom/sa.

February figures showed a stronger trade surplus at the margin. Exports climbed, led by the pro-forma export transaction of an oil-drilling rig. Imports remain at historically-low levels. Notwithstanding a robust monthly reading, we maintain our expectation of smaller trade results in 2018 and in the following years, in line with an increase in imports due to the rebound in economic activity. Excluding the rig, the quarterly moving average of the trade surplus would have shown stability at the margin.