São Paulo – Exports from Brazil to the Arab countries amounted to USD 865.5 million in January, up 17% from January 2015, according to data from the Ministry of Development, Industry and Foreign Trade (MDIC) compiled by the Arab Brazilian Chamber of Commerce.
he increase was primarily driven by higher sugar and maize exports. Sugar sales reached USD 298 million, a 259% increase over February 2015. Maize sales reached USD 126 million, a 704% increment.
Those were respectively first and third on the list of top-selling items in February. Poultry came in second at USD 175 million, down 7.7% from February of last year.
Sugar/ethanol and maize also drove growth in total exports from Brazil, with increases of 124% to USD 952 million and 329% to USD 893.6 million, respectively.
According to the zootechnician and consultant with the firm Scot Consultoria, Rafael Ribeiro de Lima Filho, maize exports are on the rise since the second half of last year, fueled by the rising dollar relative to the real and by record-high supply during the second crop of 2015, a season also known as safrinha (little crop). “And that trend persisted into the new year,” he said.
There was also weaker supply from the United States, so Brazil “took charge” of market shares usually served by the US, “not only in the Arab world, but also in Asia.”
But Lima stressed that from this month on, maize exports are expected to decline because sales of soy, which gets shipped out via the same channels as maize, begin to increase. He explained that soy shipping should have begun in February, but weather issues led to belated planting and therefore a belated harvest.
Lima believes that the fact that the real gained on the dollar over the past few weeks might make Brazilian maize less competitive internationally.
Along similar lines, Arab Chamber CEO Michel Alaby said the combination of competitive prices and abundant supply prompted Arabs to increase their purchases and stock up product. In his assessment, even if maize exports do decline, the phasing in of soy exports should lead to sustained growth in Brazilian trade with the Arab world.
Alaby also noted that in the next few months, the impact of the resumption of beef exports to Saudi Arabia and other Gulf countries will be felt to a greater extent – those markets had a ban on Brazilian product in place until November of last year. In February, frozen beef exports to the region were up 3.5% and fresh beef sales gained 14%. “In foodstuffs, there is no doubt in my mind that exports to Arabs will increase this year,” he said.
Too sweet?
Regarding sugar, the president of consulting firm Datagro, Plínio Nastari, said the data released by the MDIC’s Foreign Trade Secretariat (Secex) do not match ports’ lineup during the month. He believes numbers may have soared due to a “revision” whereby operations from other months were computed. Another industry consultant questioned by ANBA had a similar opinion.
According to the MDIC press office, data mismatch is a possibility, albeit a fairly uncommon one. The Ministry explained that customs clearance can take as many as ten days, from the time the export is declared until the time it gets computed by Secex, to the actual shipping, and because February is the shortest month of the year, it could be that operations with completion due only in March have been factored in.
Nastari remarked, however, that the Arab countries are traditionally major buyers of sugar from Brazil. Those countries combined account for the bulk of Brazilian sugar purchases, and their share of total Brazilian exports was 35.4% last year.
“Arab countries have always been very relevant, because they have the biggest refineries in the world,” the executive said. “Brazil exports mostly raw sugar, and countries like the UAE, Saudi Arabia, Algeria and Egypt have extensive refinery facilities. After refining, they sell the sugar locally and regionally,” he added.
Besides foodstuffs, Alaby believes sales could also increase for products such as construction material, footwear, cosmetics and medical equipment, since the dollar is still strong and domestic demand in Brazil is weak. “It’s up to the enterprises to be aggressive, to engage in trade shows, trade missions and other commercial promotion issues in the Arab countries,” he said.
The leading Arab buyers of Brazilian products in February were Saudi Arabia, which imported USD 189 million worth of goods from Brazil, up 23.9% from February 2015; Egypt, at USD 172.5 million, up 75.6%; the UAE, at USD 158 million, down 21.4%; Algeria, at USD 101 million, up 114.6%; and Iraq, at USD 38 million, up 363.4%.
In January and February, Brazilian exports grossed USD 1.7 billion, down 3.6% from the comparable year-ago period, as a result of weak performance in January.
Imports
Conversely, Brazil’s imports from Arab countries reached USD 505.5 million in February, down 29% from February 2015. In the first two months of this year, imports amounted to USD 708.3 million, down 30.6% from a year ago.
Alaby believes the weak imports are the result of the oil price slump and of recession in Brazil. Imports of oil and oil products fell 36.3% in January and February. Fertilizer imports, however, were up 27.6%.
*Translated by Gabriel Pomerancblum