Why lower freight costs hurt Brazil’s shoe exports
Brazil’s footwear manufacturers exported 38.4 million pairs of shoes, boots and sandals to overseas markets in the first quarter of the year, bringing in revenues of $328.4 million.
These figures represent a 5.7% decline in volume, but a 2.4% increase in value compared to the same period last year.
President of industry association Abicalçados, Haroldo Ferreira, said weak results for the month of March had cast a shadow on the industry’s results for the quarter. In March, Brazilian manufacturers and brands experienced a fall of 11.4% in export volume and of 2.6% in value year on year.
Mr Ferreira attributed these figures principally to a slowing down of the global economy owing to high levels of inflation. But he also said Brazilian companies were beginning to experience more intense competition in international markets, particularly from Chinese competitors.
He said Chinese footwear companies were now noticeably active again in export markets following the lifting of covid-19 restrictions. Another factor he pointed to was that, in March 2022, international freight costs were exceptionally high. This led to retailers across Latin America and beyond placing orders with Brazilian producers to avoid incurring high shipment charges for imports from China.
“Now, freight costs are almost 80% lower than they were a year ago,” he said.
