Economy of South America

Sugarcane plantation in São Paulo. In 2018, Brazil was the world's largest producer, with 746 million tons. South America produces half of the world's sugarcane.

Soy plantation in Mato Grosso. In 2020, Brazil was the world's largest producer, with 130 million tons. South America produces half of the world's soybeans.

Coffee in Minas Gerais. In 2018, Brazil was the world's largest producer, with 3.5 million tons. South America produces half of the world's coffee.

Orange in São Paulo. In 2018, Brazil was the world's largest producer, with 17 million tons. South America produces 25% of the world's orange.

Throughout history, since the colonial period, the export of natural resources has been key factor for South America's economy. With a land that can be divided into four climatic regions (tropical, temperate, arid and cold), South America is a diverse land that is rich in natural resources. It has a wide variety of agricultural products, mineral wealth, plentiful freshwater and rich fisheries.

As one of the most important contributors of the world's agricultural market, South America accounts for approximately 10% of the global agricultural product export.[5] The different climatic regions are home for diverse types of crops. In the tropical climatic regions, two of the most important cash crops are coffee and cacao.[6] South America dominates the global market in coffee production, having Brazil as the world's largest exporter of coffee. A report from the Council of Brazilian Coffee Exporters showed that the coffee industry earned US$5.4 billion in 2016, with the exports of different coffee varieties exceeding 34 million 60 kg bags. This accounts to 6.4% of Brazil's total annual agrobusiness exports of US$84.9. The report showed that by December 2016, the Brazilian coffee industry generated US$557 million in revenue by exporting 3.07 million bags of coffee.[7] Additionally, in 2016 soybeans, grown in South America's temperate climates, had an export value of US$19B for Brazil , representing 10.4% of the total exports,[8] and one of US$3.23B for Argentina, representing 5.7% of the country's total exports.[9] Moreover, the soybean meal exportation represent 17.5% of Argentina's total exports, with an export value of $9.96B.[9]

Other exports from the tropical regions, such as the Amazon rainforest (contained within Brazil, Peru, Colombia, Ecuador, Bolivia French Guiana and Suriname), include cashews and Brazil nuts, globally regarded as delicacies,[10] as well as sugar (sugarcane), avocados, bananas, pineapples, oranges, grapefruits, and mangoes. The sugarcane cultivation has been the backbone of the economy since early colonial times, and Ecuador is the world's largest banana exporter (Banana Production in Ecuador)

In the temperate regions, maize (corn) is produced and it is the second most exported product in Argentinas.[9] Additionally in cold climatic regions such as the Andes, there is a high production of crops such as quinoa, increasingly valued internationally, as well as the grazing of llamas, vicuñas and alpacas. These animals are bred for their wool and it is exported globally as a high-quality textile.[6]

The four countries with the strongest agriculture are Brazil, Argentina, Chile and Colombia. Currently:

• Brazil is the world's largest producer of sugarcane, soy, coffee, orange, guarana, açaí and Brazil nut; is one of the 5 largest producers of maize, papaya, tobacco, pineapple, banana, cotton, beans, coconut, watermelon and lemon; and is one of the 10 largest producers in the world of cocoa, cashew, avocado, persimmon, mango, guava, rice, sorghum and tomato;
• Argentina is one of the 5 largest producers in the world of soy, maize, sunflower seed, lemon and pear, one of the 10 largest producers in the world of barley, grape, artichoke, tobacco and cotton, and one of the 15 largest producers in the world of wheat, sugarcane, sorghum and grapefruit;
• Chile is one of the 5 largest world producers of cherry and cranberry, and one of the 10 largest world producers of grape, apple, kiwi, peach, plum and hazelnut, focusing on exporting high-value fruits;
• Colombia is one of the 5 largest producers in the world of coffee, avocado and palm oil, and one of the 10 largest producers in the world of sugarcane, banana, pineapple and cocoa;
• Peru is one of the 5 largest producers of avocado, blueberry, artichoke and asparagus, one of the 10 largest producers in the world of coffee and cocoa, one of the 15 largest producers in the world of potato and pineapple, and also has a considerable production of grape, sugarcane, rice, banana, maize and cassava; its agriculture is considerably diversified;
• Paraguay's agriculture is currently developing, being currently the 6th largest producer of soy in the world and entering the list of the 20 largest producers of maize and sugarcane.[11]

Truck of a meat company in Brazil. South America produces 20% of the world's beef and chicken meat.

Brazil is the world's largest exporter of chicken meat: 3.77 million tons in 2019.[12][13] The country is the holder of the second largest herd of cattle in the world, 22.2% of the world herd. The country was the second largest producer of beef in 2019, responsible for 15.4% of global production.[14] It was also the 3rd largest world producer of milk in 2018. This year, the country produced 35.1 billion liters.[15] In 2019, Brazil was the 4th largest pork producer in the world, with almost 4 million tons.[16]

In 2018, Argentina was the 4th largest producer of beef in the world, with a production of 3 million tons (behind only USA, Brazil and China). Uruguay is also a major meat producer. In 2018, it produced 589 thousand tons of beef. [17]

In chicken meat production, Argentina ranks among the 15 largest producers in the world, and Peru and Colombia among the 20 biggest producers. In beef production, Colombia is one of the 20 largest producers in the world. In honey production, Argentina ranks among the 5 largest producers in the world, and Brazil among the 15 largest. In terms of production of cow's milk, Argentina ranks among the 20 largest producers in the world. [18]

EMS, the largest Brazilian pharmaceutical industry

Braskem, the largest Brazilian chemical industry

The World Bank annually lists the top manufacturing countries by total manufacturing value. According to the 2019 list, Brazil has the thirteenth most valuable industry in the world (US $ 173.6 billion), Venezuela the thirtieth largest (US $ 58.2 billion, however, it depends on oil to obtain this value), Argentina the 31st largest (US $ 57.7 billion), Colombia the 46th largest (US $ 35.4 billion), Peru the 50th largest (US $ 28.7 billion) and Chile the 51st largest (US $ 28.3 billion).[19]

80% of manufacturing of the Latin America region falls on Argentina, Brazil and Mexico.[20]

Brazil has the third-largest manufacturing sector in the Americas. Accounting for 28.5 percent of GDP, Brazil's industries range from automobiles, steel, and petrochemicals to computers, aircraft (Embraer), food, pharmaceutical, footwear, metallurgy and consumer durables. In the food industry, in 2019, Brazil was the second largest exporter of processed foods in the world.[21][22][23] In 2016, the country was the 2nd largest producer of pulp in the world and the 8th producer of paper.[24][25][26] In the footwear industry, in 2019, Brazil ranked 4th among world producers.[27][28][29][30] In 2019, the country was the 8th producer of vehicles and the 9th producer of steel in the world.[31][32][33] In 2018, the chemical industry of Brazil was the 8th in the world.[34][35][36] In textile industry, Brazil, although it was among the 5 largest world producers in 2013, is very little integrated in world trade.[37]

Iron mine in Minas Gerais. Brazil is the world's second largest iron ore exporter.

Amethyst mine in Ametista do Sul. South America is a major producer of gems such as amethyst, topaz, emerald, aquamarine and tourmaline

Chile contributes about a third of the world copper production. In 2018, Peru was the 2nd largest producer of silver and copper in the world, and the 6th largest producer of gold (the 3 metals that generate the highest value), in addition to being the 3rd largest producer in the world of zinc and tin and 4th in lead. Brazil is the second largest global iron ore exporter, has 98% of the known niobium reserves in the world, and it's one of the 5 biggest world's productors of bauxite, manganese and tin. Bolivia is the 5th largest producer of tin, the 7th largest producer of silver, and the 8th largest producer of zinc in the world[38][39]

Copper mine in Chile. South America produces half of the world's copper.

In the production of oil, Brazil was the 10th largest oil producer in the world in 2019, with 2.8 million barrels / day. Venezuela was the 21st largest, with 877 thousand barrels / day, Colombia in 22nd with 886 thousand barrels / day, Ecuador in 28th with 531 thousand barrels / day and Argentina 29th with 507 thousand barrels / day. As Venezuela and Ecuador consume little oil and export most of their production, they are part of OPEC. Venezuela had a big drop in production after 2015 (where it produced 2.5 million barrels / day), falling in 2016 to 2.2 million, in 2017 to 2 million, in 2018 to 1.4 million and in 2019 to 877 thousand, due to lack of investments. [40]

In the production of natural gas, in 2018, Argentina produced 1524 bcf (billion cubic feet), Venezuela 946, Brazil 877, Bolivia 617, Peru 451, Colombia 379. [41]

In the beginning of 2020, in the production of oil and natural gas, Brazil exceeded 4 million barrels of oil equivalent per day, for the first time. In January this year, 3.168 million barrels of oil per day and 138.753 million cubic meters of natural gas were extracted.[42]

Copacabana Palace, the best hotel in South America, in Rio de Janeiro

In the list of world tourist destinations, in 2018, Argentina was the 47th most visited country, with 6.9 million international tourists (and revenues of US $ 5.5 billion); Brazil was the 48th most visited with 6.6 million tourists (and revenues of US $ 5.9 billion); Chile in position 53 with 5.7 million tourists (and revenues of US $ 2.9 billion); Peru in position 60 with 4.4 million tourists (and income of US $ 3.9 billion); Colombia 65th with 3.8 million tourists (and income of US $ 5.5 billion); Uruguay 69th with 3.4 million tourists (and income of US $ 2.3 billion). Please note that the number of tourists does not always reflect the monetary amount the country gets from tourism. Some countries carry out higher level tourism, obtaining more benefits. Tourism in South America is still little evolved: in Europe, for example, countries obtain annual tourist values such as U $ 73.7 billion (Spain), or U $ 67.3 billion (France). While Europe received 710 million tourists in 2018, Asia 347 million and North America 142.2 million, South America received only 37 million, Central America 10.8 million and the Caribbean 25.7 million. [43]

Itaipu Dam in Paraná.

Wind power in Parnaíba.

Angra Nuclear Power Plant in Angra dos Reis, Rio de Janeiro

The Brazilian government has undertaken an ambitious program to reduce dependence on imported petroleum. Imports previously accounted for more than 70% of the country's oil needs but Brazil became self-sufficient in oil in 2006–2007. Brazil was the 10th largest oil producer in the world in 2019, with 2.8 million barrels / day. Production manages to supply the country's demand.[52] In the beginning of 2020, in the production of oil and natural gas, the country exceeded 4 million barrels of oil equivalent per day, for the first time. In January this year, 3.168 million barrels of oil per day and 138.753 million cubic meters of natural gas were extracted.[53]

Brazil is one of the main world producers of hydroelectric power. In 2019, Brazil had 217 hydroelectric plants in operation, with an installed capacity of 98,581 MW, 60.16% of the country's energy generation.[54] In the total generation of electricity, in 2019 Brazil reached 170,000 megawatts of installed capacity, more than 75% from renewable sources (the majority, hydroelectric).[55][56]

In 2013, the Southeast Region used about 50% of the load of the National Integrated System (SIN), being the main energy consuming region in the country. The region's installed electricity generation capacity totaled almost 42,500 MW, which represented about a third of Brazil's generation capacity. The hydroelectric generation represented 58% of the region's installed capacity, with the remaining 42% corresponding basically to the thermoelectric generation. São Paulo accounted for 40% of this capacity; Minas Gerais by about 25%; Rio de Janeiro by 13.3%; and Espírito Santo accounted for the rest. The South Region owns the Itaipu Dam, which was the largest hydroelectric plant in the world for several years, until the inauguration of Three Gorges Dam in China. It remains the second largest operating hydroelectric in the world. Brazil is the co-owner of the Itaipu Plant with Paraguay: the dam is located on the Paraná River, located on the border between countries. It has an installed generation capacity of 14 GW for 20 generating units of 700 MW each. North Region has large hydroelectric plants, such as Belo Monte Dam and Tucuruí Dam, which produce much of the national energy. Brazil's hydroelectric potential has not yet been fully exploited, so the country still has the capacity to build several renewable energy plants in its territory.[57][58]

As of September 2020, according to ONS, total installed capacity of wind power was 16.3 GW, with average capacity factor of 58%.[59] While the world average wind production capacity factors is 24.7%, there are areas in Northern Brazil, specially in Bahia State, where some wind farms record with average capacity factors over 60%;[60][3] the average capacity factor in the Northeast Region is 45% in the coast and 49% in the interior.[61] In 2019, wind energy represented 9% of the energy generated in the country.[62] In 2019, it was estimated that the country had an estimated wind power generation potential of around 500 GW (this, only onshore), enough energy to meet three times the country's current demand.[63][64]

Nuclear energy accounts for about 4% of Brazil's electricity.[65] The nuclear power generation monopoly is owned by Eletronuclear (Eletrobrás Eletronuclear S/A), a wholly owned subsidiary of Eletrobrás. Nuclear energy is produced by two reactors at Angra. It is located at the Central Nuclear Almirante Álvaro Alberto (CNAAA) on the Praia de Itaorna in Angra dos Reis, Rio de Janeiro. It consists of two pressurized water reactors, Angra I, with capacity of 657 MW, connected to the power grid in 1982, and Angra II, with capacity of 1,350 MW, connected in 2000. A third reactor, Angra III, with a projected output of 1,350 MW, is planned to be finished.[66]

As of September 2020, according to ONS, total installed capacity of photovoltaic solar was 6.9 GW, with average capacity factor of 23%. Some of the most irradiated Brazilian States are MG ("Minas Gerais"), BA ("Bahia") and GO (Goiás), which have indeed world irradiation level records.[67][3][68] In 2019, solar power represented 1.27% of the energy generated in the country.[69]