São Paulo – After Brazil broke the export and import record last year, Brazilian exporters believe that foreign trade should also be good for the country in 2011. The tendency is for growth, boosted by international demand for commodities, in the case of foreign sales.
The Brazilian Foreign Trade Association (AEB), for example, forecasts that Brazilian product shipments should generate US$ 226 billion this year, as against US$ 202 billion in 2010. The Ministry of Development, Industry and Foreign Trade, in turn, established a target of US$ 228 billion.
To the vice president at AEB, José Augusto de Castro, imports should also continue growing, as is the case with the Brazilian trade surplus, which, due to estimates at the organisation, should total US$ 26 billion, against US$ 20.3 billion last year. If this truly takes place, there should be changes in the tendency observed in 2010, when exports expanded less than imports and the trade balance result dropped.
"It seems surprising," said Castro. "But the forecast is for the price of commodities to continue rising," he added. Brazil is a great exporter of agricultural and mineral commodities, currently in great demanded on the international market.
Simultaneously, according to him, measures being taken by the government, to control credit and inflation, should reduce domestic consumption. This should not be enough to reduce the market, but should generate surplus for export, at competitive prices.
To this may be added the available credit for the financing of foreign trade worldwide. "There is enough credit," said José Farhat, from Pankommerz Representação Comercial. "I see this year with great optimism," he added, with the knowledge of who has been operating in the sector for decades.
Commodities
In his opinion, commodities should remain on the high and the soy complex should remain as the cash cow for the agricultural sector. "Undoubtedly that is where Brazil is making money," he said, adding that "2011 will be very profitable" for the area of grain as a whole.
In general, however, iron ore should lead Brazilian commodity sales. According to Castro, product exports should reach US$ 39 billion, as against US$ 29 billion last year.
Apart from these limits, other prominent products in exports, according to Castro should be sugar, coffee, oil – with greater national production -, and gold, which is already being traded for a very high price.
Farhat, in turn, plans to explore some market niches "that should already have received greater attention by Brazilian exporters," mainly in the Middle East. He mentioned, for example, a soy product commonly used in the production of animal feed in Saudi Arabia, as well as coffee.
Although Brazil is the world’s main coffee exporter, the Arab market does not buy a significant share. "Practically all [the countries of the Middle East] buy from intermediaries in Europe and the United States. We must break [this triangle]," said Farhat.
To Ulisses Brambini, from Bello Papaya, which produces and exports papaw, the foreign market is also promising in 2011. "The foreign market is buying much. The greatest difficulty is regarding the currency, but it is still buying more than the domestic market," he said, referring to the appreciation of the Brazilian real as against the dollar, which reduces the competitiveness of Brazilian products abroad.
He exports mainly to Europe, the United States and Canada, markets that, after a period of retraction during the international financial crisis, have returned to buying the fruit at even greater volumes.
Exchange
The appreciated real is still the main concern of Brazilian exporters. "The government needs to tune the exchange policy," said Marcos Goulart, from Alliance Commodities.
He suggested, for example, greater taxes on speculative capital entering the country. Not enough to reduce operations in the national financial markets, but enough to take some foreign currency out of circulation and appreciate the dollar. Castro added that the appreciated real inhibits exports of Brazilian manufactured products.
Alliance was specialized in dairy, but has diversified its product portfolio, as the price of Brazilian dairy is too high, due to the domestic demand, and it cannot compete on the global market.
Leonardo Bonaparte, from trading company Azimut, and the commercial representative of dairy Tangará, explains that there are currently no great expectations as to the return to exports of dairy. "At least not in the first half," he said. He recently started working with other export items, like margarine and mayonnaise, and sees good perspectives in sales to Africa, the Middle East and the Caribbean.
In the area of international purchases, Castro added that, in 2011, the highlight should be capital goods and raw material as a whole. Farhat, in turn, said that he should invest in the import of fertilizer from the Middle East, a region that produces great volumes of the product. Brazil has great dependence on the import of these agricultural inputs. It also wants to attract Arab capital to agricultural projects in Brazil.
*Translated by Mark Ament
