São Paulo – Exports from Brazil to the Arab countries generated US$ 545.7 million in January, a reduction of 12.14% in comparison with the same month last year, according to figures supplied by the Foreign Trade Secretariat and compiled by the Arab Brazilian Chamber of Commerce. The reduction, however, was much lower than total foreign sales of Brazil, which dropped 26.3% in the same comparison.
In this scenery, the participation of the Arab world as a destination for Brazilian products rose from 4.68% in January 2008 to 5.57% last month, a record percentage. Among the regions to which Brazil exports, there was only real increase in shipments to Asia in the first month of the year.
The product that weighed most heavily on the reduction of sales to the Arabs was meat and ores. In the case of agricultural products in general, the director of the International Promotion Department at the Ministry of Agriculture, Eduardo Sampaio Marques, said that exports reached excellent levels early last year, which partly explains the lower values last month, as shipments in January 2009 were above the average of previous years.
Sales of chicken, for example, totalled US$ 97 million, with 81,000 tonnes shipped last month, as against US$ 150 million and 91,000 tonnes in the fist month of 2008. The figures for 2009, however, are still much greater than those for January 2007, when exports generated US$ 72 million with 63,000 tonnes sold.
"And 2007 had already been a good year," said Marques. In his evaluation, what stunted chicken sector sales in January this year was the lower price of the product on the foreign market.
In the area of beef, however, the situation is different. There was significant reduction in export revenues and in volume shipped. This phenomenon took place in total sector sales, not just to the Arab market. In a press conference last week, the executive director at the Brazilian Beef Industry and Exporters Association (Abiec), Otávio Hermont Cançado, said that the financial crisis had a strong influence on the performance, as credit was lacking for exporters and importers.
In the same line as Marques, Cançado added that exports in January 2008 were above normal, as many exporters anticipated sales at the time. In the case of the Arab world, however, the shipments were just 12,000 tonnes last month, even lower than in January 2006 and 2007.
As a whole, Brazilian agribusiness sector sales to the Arabs did not have such a negative result. Revenues obtained in January reached US$ 397.5 million, a reduction of just 4.7% in comparison with the same month last year. Some products, like sugar, maize and soy oil, registered expressive growth in sales. It is worth recalling that total soy oil exports dropped in the month.
Agricultural sector exports to some important countries also did not disappoint, as was the case to Saudi Arabia, Algeria, Yemen and Sudan. Maize, for example, helped boost sales to the Saudi Market, taking the place of sugar in the second place in the basket, only behind meats. In Algeria the highlight was soy oil, in Yemen and Sudan, sugar.
Ores
Outside agribusiness, sales of ores, the third item in the export basket from Brazil to the Arab nations, dropped 45.5% over January 2008. According to the manager of the economic data department at the Brazilian Mining Institute (Ibram), Antonio Lannes, the crisis made the international demand for steel drop, which, in turn, affected the trade of iron ore. With great availability of energy, the Arab countries, especially those in the Gulf, had been investing heavily in the ironworks sector. "I believe that they are adjusting production and, for this reason, are buying less ore," he said.
Total exports from Brazil in this area even rose in January, but, according to Lannes, the performance was almost exclusively boosted by China, which had low stocks of iron ore and needed to expand imports to face the demand created by the billion dollar package launched by the local government to face the crisis. To the manager, this scenery may be showing "a light at the end of the tunnel" with regard to iron ore.
Surplus
Imports of products from the Arab world, in turn, dropped 58.96% and reached US$ 321.85 million in January. This way, Brazil returned to a surplus in the trade balance with the region, US$ 223.82 million. Total imports of Brazil also dropped in the period, but at a lower level: 16.6%.
According to the Ministry of Development, Industry and Foreign Trade, the lower expenses with oil due to the lower prices of commodities helped pull down Brazilian foreign purchases in January. In the case of the Arabs, it is one of the main export products to Brazil.
*Translated by Mark Ament