Isaura Daniel*
São Paulo – After reaching record revenues of US$ 5.2 billion last year, Brazilian exports to the Arab countries are getting ready to leap once more this year. The Arab Brazilian Chamber of Commerce forecasts are for sales of US$ 6.2 billion in 2006, a 20% increase in comparison to last year. The figures were announced yesterday (11) by the president of the organization Antonio Sarkis Jr. at a press conference.
The percentage is greater than the 12% growth estimates that the Brazilian government has made for country exports in 2006. According to Sarkis, the Arab Brazilian Chamber forecast is based on expectations for growth of the world economy this year and also on the increase of prices of some of the main commodities exported by Brazil to the Arab countries, like sugar and coffee.
Sarkis recalls that Embraer, the Brazilian aircraft maker, closed a deal for the sale of 15 Embraer 170 jets to Saudi Arabian Airlines last year, and part of the aircraft should be delivered this year. The first one was delivered to the Saudi company at the beginning of December and entered into operation at the beginning of this year. The company is the first in the Middle East to use the regional jets produced by Embraer.
According to Sarkis, the Arab Brazilian Chamber is going to work on diversification of the trade basket and will pay special attention to the promotion of manufactured articles and civil construction products. In 2005, 1,901 items were included in the trade basket, against 1,867 in the previous year. The president of the Arab Chamber recalls that the Arab countries are making large investment in construction and that the engineering and construction material companies may find good business opportunities in the sector.
"Algeria has a five-year plan for investment of over US$ 50 billion in infrastructure projects like highways, airports and houses," stated Sarkis. He recalls that the Arab countries are not self-sufficient in the sector and need services by foreign companies. Toyota, for example, is going to build a 20-storey business building in Doha, Qatar, and is open to proposals from Brazilian construction companies. Due to the expressive increase in the number of constructions in Qatar, local companies are not available to begin new jobs.
Target: US$ 15 billion
Although the official target for growth of Brazilian exports to the Arabs is 20%, Sarkis believes that the percentage may be exceeded. "This is a realistic figure, but we are always working so as to exceed forecasts," stated the Arab Brazilian Chamber president. He added that the 29% growth in exports in 2005 has made it possible to reach the target of increasing bilateral trade between Brazil and the countries in the region to US$ 15 billion by 2007, stipulated by the Brazilian minister of Development, Industry and Foreign Trade, Luiz Fernando Furlan.
In 2005, trade between Brazil and the Arab world reached US$ 10.5 billion. Country exports to the Arab nations grew 29% and reached US$ 5.2 billion, and imports totalled US$ 5.3 billion, an increase of 28%. Imports should not oscillate much this year, according to Sarkis. "The value of imports is very susceptible to oil prices. We mainly import oil, phosphates and fertilizers from the Arab countries," stated the organization president. Oil prices should not grow much this year, as they have already had considerable highs in 2005.
Tunisia
The Arab Brazilian Chamber, however, is also working on diversification of the basket of products coming from the Arab world. In November, during a Brazilian trade mission to Tunisia, the possibility of importing olive oil from the Arab country and packing it in Brazil started being discussed. Next week, a delegation of Tunisian businessmen and authorities, led by the minister of Foreign Affairs, is going to visit the Brazilian capital city, Brasília, and São Paulo, the largest industrial centre in the country, to discuss bilateral cooperation in various sectors.
Sugar, poultry, ore
The main products shipped by Brazil to the Arabs last year were sugar, poultry, iron ore, cattle beef, soy oil, chassis and engines and tractors. The countries in the League of Arab States answered, in 2005, to 4.4% of country exports and, between January and November, were in fifth place as the main destinations for sales, behind the United States, Argentina, China and Holland.
According to Arab Brazilian Chamber estimates, the largest buyer of Brazilian products among the Arabs was Saudi Arabia, US$ 1.2 billion, followed by Egypt, US$ 868 million, the United Arab Emirates, US$ 727 million, and Morocco, US$ 414 million. The largest Arab suppliers to Brazil were, in turn, Algeria, US$ 2.8 billion and Saudi Arabia, US$ 1.3 billion.
*Translated by Mark Ament
