São Paulo – Exports from Brazil to the Arab countries were down 20.3% in October from a year ago, as per Ministry of Development, Industry and Foreign Trade data compiled by the Arab Brazilian Chamber of Commerce. Revenues stood at USD 1.01 billion in October, and USD 1.2 billion in October of last year. Year-to-date through October, revenues declined 8.6% to USD 10.1 billion.
The president of the Brazilian Foreign Trade Association (AEB), José Augusto de Castro, ascribes the decline to the lower price of exported products like sugar and ore. Sugar sales to Arabs dropped 37% year-on-year in October, and mineral products sales dropped 76%. The international prices of raw sugar and ore were down 27% and 44%, Castro said.
Sugar prices, however, are expected to bounce back. “At least by 25%,” the AEB president told ANBA regarding the prospects of a pickup in the commodity’s prices next year. Brazil accounts for 50% of global sugar production, and as a result of ethanol production incentives, it should offer less of the product to the international market. Both ethanol and sugar are made from sugarcane, and executives opt for the most profitable one, which is ethanol at this time. Ore prices, in turn, are expected to remain at current levels in 2016.
Castro remarks that the Middle East is a potential buyer market for Brazil, whose manufactured goods it could buy in higher amounts. “It is an untapped market,” he says, noting that commercial promotion actions are needed in order to increase market share in the region.
In October, the top Arab buyer of Brazilian products was Saudi Arabia, followed by Egypt, the United Arab Emirates, Algeria and Morocco. Saudi’s imports increased by 24% and the other countries’ declined. The top-selling products were animals and animal products, processed foodstuffs, vegetables and vegetable products, and defense industry material. Sales were biggest for the latter two.
Brazilian imports of Arab products were up 28.5% year-on-year in October, from USD 857 million to USD 1 billion. From this amount, USD 895 million concerned oil and oil products, whose imports climbed 48.4% in value. Year-to-date through October, imports declined by 37.2% to USD 5.8 billion.
*Translated by Gabriel Pomerancblum
