São Paulo – Brazil’s exports to the Arab world totaled USD 935 million in November, a 10% climb over the same month of last year, according to data from the Ministry of Industry, Trade and Services (MDIC) that were compiled by the Arab Brazilian Chamber of Commerce. Sales to two of the region’s main markets presented a sharp increase: Saudi Arabia and the United Arab Emirates.
“With the rise in oil prices, the trend is for them to have more resources to spend with imports,” remarked the CEO of the Arab Chamber, Michel Alaby. The prices of the commodity started to go up on November 30 when the Organization of the Petroleum Exporting Countries (OPEC) ratified the so-called Algiers Agreement, which calls for a reduction of 1.2 million daily barrels in the output of member countries in 2017.
This week, oil-producing non-OPEC countries decided also to cut their output starting in January, and the International Energy Agency (IEA) believes there could be a 600,000 barrels deficit between supply and demand in the first six months of next year. That is, the pressure on prices should remain. “Exports to the Gulf, especially, should improve after the boost from the OPEC agreement,” explained Alaby.
Other experts on foreign trade share a similar view. Early this week, for instance, the president of the Brazilian Beef Exporters Association (Abiec), Antonio Jorge Camardelli, said that the rise in oil prices could benefit sales of the sector to the Arab world in 2017.
In November, exports to Lebanon, Oman, Iraq, Bahrain, Djibouti and Libya improved significantly.
For the region overall, there was an increase in the number of shipments especially with sugar, iron ore, auto, iron and steel pipes, and fresh beef. However, sales of frozen beef declined. According to Camardelli, 88% of the beef exported by Brazil is frozen, with only 12% being fresh. He said it is in the interest of the sector to expand exports of fresh beef, since there’s no need to maintain the freezing of the product throughout the supply chain, cutting costs and improving the flow.
Shipments of sugar increased in number to many countries, such as the UAE, Algeria, Saudi Arabia, Egypt, Djibouti, Iraq, Lebanon and Morocco. Auto sales focused almost solely in Saudi Arabia. Exports of ore went up especially to Bahrain, Oman, Libya and Egypt, with exports of pipes increasing to Saudi Arabia and the UAE. The latter also bought more fresh beef, as well as Lebanon.
The improvement in sales of soy bran to Saudi Arabia and Yemen, of live cattle to Lebanon and Egypt, and copper cables to Qatar were also highlights. It’s worth mentioning that this year Egypt authorized imports of live cattle from Brazil, which were suspended in the second half of 2014, and Lebanon authorized the resuming of purchases of animals and beef from Paraná after almost four years of an embargo.
Alaby sees as positive the increase in shipments of iron ore, since this could be signaling an improvement in industrial activity in that part of the world. The mining company Vale owns a pellet plant and a maritime terminal in Oman, with the latter being used to the distribution of the product to the nearby countries.
From January to November, Brazilian exports to the Arab world totaled USD 10.3 billion, a decline of 6% in comparison to the same period of 2015. Alaby points out, however, that November’s results signal a positive trend or, at least, the maintenance of the levels achieved.
Imports
Imports, meanwhile, reached the total of USD 413 million last month, a drop of 42% over November of last year. Year-to-date, purchases totaled USD 5 billion, a fall of 25% over the period from January to November of 2015.
According to Alaby, this happened due to a decline in average prices of items imported from the region, since total volume bought by Brazil increased. The main products sold were oil, gas and products, and fertilizers.
However, in both November and year-to-date there was an increase in imports of fish and electrical material. Fish came from Morocco and Oman, and electrical material came especially from Morocco, Tunisia, UAE and Egypt.
*Translated by Sérgio Kakitani
