Isaura Daniel
São Paulo – Brazil may double dairy product exports to the Arab countries next year, according to the president of the Brazilian Association of Milk Producers (Leite Brasil), Jorge Rubez. Of the US$ 78 million the sector generated with exports of milk and dairy products between October last year and September this year, US$ 27.5 million, or 35%, came from the Arabs. "If we work well, exports to the Arabs may even double next year," stated Rubez.
Sales to the region should help the sector end the year with a trade balance surplus. Historically, the trade balance has always been negative for Brazil. In the first nine months of 2003, for example, the dairy product sector had a negative balance of US$ 57 million in foreign trade. In the first nine months of this year, the deficit has already dropped to US$ 4 million. Exports, which totalled US$ 28 million between January and September 2003, reached US$ 57.5 million in the same period this year, according to figures supplied by the National Confederation of Agriculture and Livestock (CNA).
If recent months are taken into consideration, however, the sector already exports more than it imports. In September, sales totalled US$ 8 million and purchases US$ 7.2 million, which generated a positive balance of US$ 820,000. The Leite Brasil president believes that 2004 will end with foreign trade close to US$ 100 million.
The sector exports powdered and long life milk, sour cream, yoghurt, curds, whey, butter, condensed mild, and cheese. Exports are done through trading companies in the sector or through large industries like Nestlé, Itambé and Elegê. Itambé, for example, has already won a United Nations (UN) tender to supply powdered milk to Iraq.
The Middle East and North Africa should remain as main destinations for Brazilian dairy products. "The tendency is for living conditions to improve in the Arab countries and for them to purchase more food, which gives us conditions to expand the dairy product market," stated Rubez. Among the main buyers from Brazil in the region is Iraq. The country spent US$ 17.4 million with Brazilian powdered milk in the 12 months up to September.
Another significant importer is Algeria, which purchased US$ 4.5 million in powdered milk in the period. The United Arab Emirates, Egypt, Jordan, Sudan, Saudi Arabia, Mauritania, Lebanon, Tunisia, Morocco, Oman, Yemen and Libya also purchase Brazilian dairy products.
More milk from Brazil
The reduction of the negative result in the Brazilian dairy product trade balance was possible due to the greater country milk production. The country should end the year with 23.5 billion litres produced. Last year, production totalled 21.8 billion. The rhythm of production growth should continue at around 5% next year, according to the president of Leite Brasil. If production continues at the forecasted volume, the increase this year should be 7% over 2003.
"As production has risen, we were able to use the excess for export," stated Rubez. A large incentive for this increase in Brazilian dairy production was the antidumping measure against Argentina and Uruguay in 2002, making it impossible for both countries to sell milk to Brazil at prices lower than those practised on their domestic markets. Milk from the European Union also pays compensatory tariffs so as not to enter Brazil too cheap, due to the subsidies that the bloc provides its farmers.
