Alexandre Rocha*
São Paulo – It was not only export revenues from Brazil to the Arab countries that grew in the first half. The number of companies that sold to the region also grew, as did the number of products shipped. In the case of companies, according to figures supplied by the Foreign Trade Secretariat (Secex), the total rose from 1,257 in the first six months of 2004 to 1,357 in the period between January and June this year. That is, 100 more companies. At the same time, the general number of Brazilian export companies remained stable.
A similar phenomenon took place in the trade basket. The total of products shipped rose from 1,440 in the first half of last year to 1,535 in the same period in 2004, or 95 items more. This is the difference between the items that entered the Secex list and those that stopped being exported to the region. For the analysis, only products in the trade basket that are worth over US$ 100 were analysed.
In all, exports to the Arab countries generated US$ 2.2 billion to Brazil in the first five months of the year, an increase of 18% in comparison to the same period in 2004, as informed by ANBA at the beginning of this month.
"The increase in revenues, in the number of companies and products shows sustainable growth. That is, the Arab countries are consolidating themselves as a strong market," stated the president of the Arab Brazilian Chamber of Commerce (CCAB), Antonio Sarkis Jr.
"Figures show that the increase should continue in the medium and long term, which is sustainable growth, not only sporadic," added the vice president of the Brazilian Foreign Trade Association (AEB), José Augusto de Castro.
In the evaluation of specialists in foreign trade, various factors have been guaranteeing the growth of foreign trade with the region, despite the appreciation of the Brazilian real against the dollar in recent months. One of them is the increase in the buying power in various of the Arab countries, due to the explosion in oil prices.
"New companies are selling more of the same products that were already exported to the region, so as to answer to the demand crated by the increase in buying power," stated CCAB secretary general Michel Alaby. And one thing leads to another.
"The quality of some key products, as is the case with cattle beef and chicken meat, ends up generating export incentives to others," added Alaby. To him, the choice of Brazil as an export platform for some multinational companies, especially in the vehicle sector, has also been influencing foreign trade figures with the Arabs.
Other factors pointed out by specialists are the closer political ties. "This performance reflects the most recent actions adopted for closer ties, as is the case with the Summit of South American – Arab Countries," stated Humberto Barbato, the director of the foreign trade department at the Centre of Industries of the State of São Paulo (Ciesp).
"The trade missions that have taken place and the visit by president Lula also contributed to the closer ties between companies," stated Castro, referring to the trip by president Luiz Inácio Lula da Silva da Silva to five Arab countries in December 2003. Apart from that, to him, the war in Iraq has created resistance in part of the population to products made in the United States, opening doors to Brazilian exporters.
Added value
One factor that is attracting attention when analysing the figures is that a good part of the new items included in the trade basket are industrialized products, with greater added value. Among them are iron and steel bars, maize oil in bulk, refined cotton oil and cheese. Just to mention some products.
"It is natural for participation of industrialized products to grow when there is an increase in the buying power of the market," declared Barbato. "And this should continue for two reasons: firstly because the Arabs are demanding, wanting quality, which Brazil can offer, secondly because we have done our homework, investing in productivity. Companies know that they need to invest in competitiveness," he added.
Among the sectors that should expand their business with the region, according to Barbato, are electric material, as the demand for infrastructure in the energy sector is rising in the region, as well as the metal mechanic, auto industry and auto parts sectors.
In the opinion of analysts, the business with the Arab countries is a route of no return. "Those who won the Arab market know how much it would cost to loose it. Even with the unfavourable exchange rates it is interesting to maintain these markets, as exchange rates fluctuate and the market cannot be ignored," stated Castro. "The Arab countries are no longer an unknown market and companies have already identified their potential," stated Sarkis.
*Translated by Mark Ament
