São Paulo – Exports from the Brazilian food and beverage industry to the Arab countries were down 8.7% in 2020 from the previous year. The bloc purchased USD 6.19 billion worth in products last year. Despite the decline, the Arabs remain as the second largest purchasing market of Brazil’s food industry, only behind Asia. The figures were made public on Wednesday (24) by the Brazilian Food Industry Association (ABIA).
The Brazilian food industry’s top purchasing countries include Saudi Arabia and the United Arab Emirates, which ranked 6th and 8th, respectively. “There’s a major focus on Asia and the Arab countries, where we have decades-long partnerships and there’s a very fruitful, complementary economy, and we still have many opportunities to tap into,” ABIA board chair Grazielle Parenti said during a press conference.
Overall, the industry shipped year-on-year 11.4% more in 2020, fetching USD 38.2% billion. This accounts for a 25% share from total food sales in 2020. In 2019, this figure was 19.2%,
ABIA executive president João Dornellas said the country must focus increasingly on exports beyond promising markets such as the Arabs. “Brazil must not see itself as a breadbasket but the world’s supermarket. We have the capacity and technology for that, to create jobs and businesses and export manufactured products,” Dornellas said in the press conference.
Brazil is the world’s second largest exporter of manufactured food produtcs. The sharp increase in exports was highly due to the real depreciation. Other factors include the demand for food imports from Asia, particularly China. China is the top buyer of products from Brazil at USD 8.2 billion, followed by Hong Kong at USD 1.9 billion, and the Netherlands at USD 1.7 billion.
Domestic market
Domestic sales saw a slight decline of 0.5% in actual sales. The figure includes retail and food service. The latter was heavily impacted by the pandemic, down 24.3% in 2020, while the retail market climbed 16.2%.
The industry’s revenue last year posted a 12.8% growth from 2019, fetching BRL 789.2 billion (USD 145,4 billion). The figure includes exports and domestic sales and accounts for 10.5% of the country’s GDP, according to a study by ABIA.
Regarding the food price increases in Brazil, the entity pointed out this was partially due to investments the sector has made to tackle on the pandemic. The industry, which remained as an essential service, adopted extra health protocols, including the use of additional PPIs and distributing production across more shifts.
In a gradually recovering economic situation where Brazil vaccines its population until it reaches a herd immunity against the COVID-19, ABIA estimates a growth over 3% in actual sales in 2021. “Regarding the tax reform, it’s imperative that Brazil has a simpler tax system that doesn’t burden the consumer on what’s basics for any citizen: their food,” Dornelles was quoted as saying in a news release. The industry believes it’s a key topic to maintain tax exemption on basic food products.
Translated by Guilherme Miranda
