São Paulo – Brazilian exports to the Arab countries totalled US$ 14.83 billion in 2012, with a 1.97% drop over 2011. Saudi Arabia, the main importer from Brazil in the region, dropped purchased by 13.70%, to US$ 3 billion.
"There was a reduction in exports to Saudi Arabia, mainly late into the year, due to the high stock of food, caused by Ramadan (the month in which the Muslims fast during the day) and Hajj (the annual pilgrimage to Mecca),” explained Michel Alaby, CEO at the Arab Brazilian Chamber of Commerce.
Apart from the significant volume of food stocked in Saudi Arabia, he also pointed out other factors that boosted the lower exports to the Arab countries in general. "A little of the European crisis, as many countries depend mainly on financing by European banks, and other problems in the environmental scope, which affected the economy and made domestic supply harder in some countries,” he said.
Egypt, the second main Arab market for Brazilian products, had slight growth in imports from Brazil, to US$ 2.71 billion, 3.35% more than in 2011. "Despite the crisis, the country maintained growing imports as they must guarantee food to the population, which is one of the foremost problems of the social revolution. Apart from that, the great buyer of these foods has been the government, so the level has been maintained,” explained Alaby.
The United Arab Emirates, an export hub to other nations in the Middle East, Africa and Asia, bought US$ 2.45 billion in Brazilian products, growth of 13.26% over 2011.
Among the other Arab countries, Algeria (-21.71%), Bahrain (-40.05%), Kuwait (-12.25%) Iraq (-28.06%) and Syria (-74.76%) also presented significant drops in purchases, while Oman (35.73%), Yemen (38.37%), Libya (315%), Jordan (13,87%) and Mauritania (23.56%) increased their purchases from Brazil.
In the basket of main products exported to the Arabs in 2012 are sugars and confectionery products (US$ 4.24 billion), meats (US$ 3.93 billion), ores (US$ 2.44 billion) and grain (US$ 1.5 billion).
Imports
Purchases of Arab products by Brazil grew 11.15% in 2012 in comparison with 2011, reaching US$ 11.09 billion. The growth in Arab purchases was boosted by purchases of oil and gas, petrochemical products in general and raw material for fertilizers.
"If you observe it, you are going to see that we also import petrol, and, in the case of oil, we import light oil as our refineries do not have the capacity to refine heavier oil,” said Alaby.
Imports of fossil fuels from the Arab countries totalled US$ 9.11 billion last year, while fertilizer purchases totalled US$ 1.31 billion.
Alaby stated, however, that there is significant space for Brazil to expand its imports from the countries of the Middle East and North Africa, including products like olive oil, dates, cotton and garments, wine, ethnic products, marble and granite, cosmetics, handicraft, locks, disposable hospital products, dehydrated food, fish, herbs and spices, leather articles and food sector inputs.
"It is important to recall that there are already some trade agreements with the countries in the Mercosur, like that with Palestine, for example,” he pointed out.
Expectations for 2013
To the Arab Brazilian Chamber CEO, it is still early to make forecasts regarding Brazilian exports to the Middle East and North Africa this year, but he believes that some factors may increase sales to the region.
"If we maintain the return to exports of beef to the Arab markets and the expected investment by Arab countries in infrastructure and construction, we may work more firmly to revert this scenery of reduction, which was not as significant as the general drop of Brazilian exports to the world, but I have the feeling that this year we may, at least, maintain growth of around 5% in trade with the Arab countries,” he finished off.
*Translated by Mark Ament
