São Paulo – The Arab countries of the Middle East and North Africa should enter the sights of Brazilian maize exporters. The Market Development Department at the Arab Brazilian Chamber of Commerce has identified the grain as one of the products that may stimulate greater Brazilian exports to the region.
"We have developed a study that shows how the Arab countries import more than the global average. The analysis of sectors like construction, food and fashion show that they import 20% more than the global average. Brazilian participation is still below 3%, i.e., there is much space for growth,” said Rodrigo Solano, the Market Development Manager at the Arab Brazilian Chamber.
Missions promoted by the organisation also show good potential. “In actions organised by the Arab Brazilian Chamber this year, like participation in the Djazagro fair, in the agricultural and food sector, which took place in Algeria, in April, many Arab companies showed interest in buying maize from Brazil,” he said. “Apart from that, at the prospecting and investment mission in Kuwait and the United Arab Emirates, (promoted in May), we identified large organisations whose interest is investing in agriculture in Brazil for supply of their own countries,” he added.
In 2009, exports of maize to the Arabs grew 70%, from US$ 167 million to US$ 284 million. In the first four months of 2010, however, exports of maize to the region presented a reduction of 27% over the same period in 2009, dropping from US$ 85 million to US$ 62 million.
According to agronomist Thomé Guth, a maize market analyst at the National Food Supply Company (Conab), the growth registered last year is due to the lower crop in Argentina, when the neighbouring country production dropped by 12 million tonnes. "Argentina had no maize for export in 2009 and Brazil made use of this window and opened new markets,” he explained.
The 27% reduction registered in the first four months of the year, according to Guth, is credited to the fact that the price of maize dropped in early 2010. Apart from that, according to Guth, the second half of the year is always better for Brazilian maize exports.
"Traditionally, except for last year, the first half tends to be weaker. Argentina normally picks and harvests from the beginning of the year to the months of May and June. The cultivation and crop in the United States only starts in October. At other periods of the year, the question is surplus export,” said the agronomist.
According to Guth, up to September, Brazil has a good window for export. “The boom of exports is now. I believe that trying to enter this market more strongly will be very good for Brazil,” he said.
The analyst mentioned the case of Morocco, which imported just 173,000 tonnes of Brazilian maize in 2008, but bought 417,000 tonnes in 2009 and this year has already imported 200,000 tonnes. "The tendency is for Morocco to be an expanding market for Brazil,” he said. "It is impressive for Brazil to seek these markets as Europe, for example, has many tariff barriers,” he said.
Ever since 2007, Brazil has been maintaining annual production of over 50 million tonnes of maize. This year the Conab forecast is for Brazil to pick around 54 million tonnes. Domestic consumption should be approximately 46 million tonnes.
With regard to exports, excluding 2007, when sales of the grain reached almost 11 million tonnes, they tend to remain at around seven million tonnes. For the crop this year, the Conab estimate is that they should reach 8.5 million. “Brazil has entered some markets and now needs to maintain relations,” he said.
The technician also pointed out the Brazil has many areas free of genetically modified products, and this may mean a differential for the country. "It will only not be a differential if the market does not pay for that. I do not know if that is the case with the Arab market, but Japan and the United States wish to buy non-genetically modified products,” he finished off.
*Translated by Mark Ament
