São Paulo – Revenues from exports from Brazil to the Arab world totalled US$ 9.4 billion in 2009. There was a 4.36% reduction compared with the previous year. The reduction, however, was lower than that of Brazilian foreign sales as a whole (-22%), and led the Middle East and North Africa’s share as destinations for goods from Brazil to rise from 4.96% in 2008 to 6.14% last year.
The figures were disclosed today (19th) by the Arab Brazilian Chamber of Commerce. “In relative terms, trade relations between Brazil and the Arab countries were very important in 2009 due to the retraction of global trade,” said the Arab Brazilian Chamber president, Salim Taufic Schahin, in a press conference held at the organization’s headquarters, in the city of São Paulo.
Aside from the world financial crisis, which affected international trade as a whole, Schahin underscored that the appreciation of the real (Brazilian currency) against the dollar also harmed Brazilian exports. “This is what the floating exchange rate is like, sometimes it helps and sometimes it gets in the way, with regard to exports,” he stated.
If, on the one hand, the crisis slowed down global trade, on the other hand it led to a strong surplus, on the Brazilian side, in trade between Brazil and the Arab countries. Brazilian imports of goods from the Arab world totalled US$ 5.22 billion last year, a 50.19% reduction compared with 2008, resulting in a surplus of US$ 4.18 billion.
“[The trade balance] has shown a very significant surplus,” said Schahin. “In the next few years, modest surpluses will be the trend,” he added. The main items that Brazil imports from the Arab world are oil and derivatives. The retraction of demand and the commodity’s price drop have led exports to decrease in volume and value.
Agribusiness
With regard to exports, the Arab Brazilian Chamber president highlighted the performance of agribusiness. “Brazil is quite competitive in terms of agribusiness exports to the Arab world,” he claimed.
Meats, both chicken and bovine, were the main items in the basket, even though revenues from shipments dropped by 1.93% from 2008 to 2009. Schahin believes, however, that meats sales should return to growth before the end of the year, because “there is a strong demand in the Arab world.”
The second item in the export basket was sugar, with growth of 44.75%. Schahin underscored that Brazilian sugar exports were favoured by the drop in production in India, which, aside from not having exported the product in 2009, had to import it in order to supply its domestic market. “I believe that exports of sugar are going to grow before the end of the year,” he said.
He also highlighted other agricultural products such as soy, maize and dairy, which have started gaining importance in trade with the Arab world, and should grow even further in the next few years.
Manufactured goods
After meats and sugar, the other two most exported items in 2009 were iron ore and aircraft. To Schahin, the great challenge lies in increasing sales of manufactured goods. In the case of the Brazilian aircraft manufacturer Embraer, he expects a recovery in trade with the Arab world starting in 2011. “The Arab world is a very important market to the company,” he said.
Along the same lines, he believes that there will also be a recovery in exports of other vehicles and auto parts starting in 2011. To a certain extent, however, the resumption should start this year. From 2008 to 2009, auto industry sales to the Arab world dropped by 50%.
The leading destinations for Brazilian products in the Arab world in 2009 were Saudi Arabia, the United Arab Emirates, Egypt and Algeria.
*Translated by Gabriel Pomerancblum
