São Paulo – Brazil increased spending on products from the Arab world by 29% in July, according to Ministry of Development, Industry and Foreign Trade figures compiled by the Arab Brazilian Chamber of Commerce. Arab country revenues with sales to Brazil rose from US$ 1.22 billion in July 2012 to US$ 1.57 billion in the same month this year. The volume bought also rose in the period, by 31%.
The sales growth was due to higher shipments of mineral fuels, mostly oil. Fuels accounted for 87.6% of the export of the Arabs to Brazil, at US$ 1.38 billion. There was a 27% increase in volumes of mineral fuels exported, and 30% in revenue, which means that oil and its products were sold to the country at slightly higher prices than in July 2012.
Saudi Arabia, Brazil’s largest Arab supplier, was not responsible for the growth. Saudi sales to the country dropped 1.5% from July last year to the same month this year, to US$ 666.92 million. Exports by Algeria, in turn, grew 36.49%, from US$ 267.9 million to US$ 365.6 million. Iraq, which had not sold to Brazil in July 2012, exported US$ 124 million, coming in third place among Arab suppliers. Kuwait increased sales from US$ 5.5 million to US$ 109 million.
In the accumulated result for the first seven months of the year, imports fell 1.28%, to US$ 7.2 billion. In this case, mineral fuels were responsible for the fall. They participated with US$ 5.8 billion and the decrease in sales was 8.16%.
Lower exports
Brazil’s exports to the Arab world fell in the first seven months of the year, and also in July alone. In the accumulated result for the year, they dropped 3.46%, to US$ 7.6 billion. In the same months of 2012, they had totalled US$ 7.8 billion. In July the drop was 19%, from $ 1.3 billion to US$ 1.05 billion. According to the CEO at the Arab Brazilian Chamber, Michel Alaby, the main reason for this decline was beef. The product was sold for 8.4% lower prices from January to July this year over the same period in 2012.
In the trade basket as a whole, however, there was an increase in average prices of items shipped, as the fall in export volume was greater than was that of revenues, at 6.15%. In the first seven months of the year, meat revenues rose 11.38%, living animal sales rose 104% and those of sugar and confectioneries, 1.15%, among others. But sales of milk and dairy, tobacco, meat preparations, ores and cereals fell.
Alaby states that there may be supplier switching, mainly in grains like soybeans and maize. Brazil should, according to Alaby, make use of the opportunity to export more dairy products to the Arab world now. New Zealand, one of the leading global suppliers of milk, is facing marketing problems due to the sale to China of milk powder contaminated with bacteria that can cause botulism.
According to the CEO, there is still a chance for Brazil to sell more to the Arab world before the end of the year, since Hajj, the Muslim pilgrimage that takes place in Saudi Arabia every year, should take place in about two months. As this religious event results in massive displacement of people, there is great food consumption.
*Translated by Mark Ament
