São Paulo – Saudi Arabia wants to guarantee its population’s food security. For such, it will invest in producing and purchasing food in foreign countries. Within this context, Brazil is one of the main allies. Proof of that is the fact that the Arab country wants to boost trade of agribusiness products with Brazil and invest in the sector here. The matter was discussed today (4th) during the “Brazil-Saudi Arabia Business Meeting” in São Paulo, which was attended by the Saudi minister of Agriculture, Fahad Abdulrahman Bal Ghunaim, and a mission of government officials and businessmen from his country. They met with Brazilian government officials and entrepreneurs.
According to Ghunaim, scarcity of water resources forced the Saudi government to reduce its grain production, as it demands heavy water consumption. “Thus, king Abdullah [bin Abdel-Aziz al-Saud] advised Saudi businessmen to invest in countries that possess good farming conditions,” he explained.
Brazil tops the list of intended Saudi agribusiness investment targets. In addition to increasing food purchases from the country, the Arabs are also seeking opportunities to invest their capital. According to the Saudi minister, the total sum to be invested under the food security program has not been defined yet. The mission currently in Brazil should help define how much the country may receive and what fields of agribusiness will be targeted. “The idea for this mission is to check the level of development of agriculture in Brazil,” said Ghunaim.
Saudi Arabia is the leading buyer of Brazilian agribusiness products in the Arab world. The main products imported are beef, sugar and grain. According to Ghunaim, his country is also interested in importing maize, rice and wheat. From January to August 2010, Saudi agricultural imports reached US$ 1.18 billion. Overall, Brazilian exports to the Arab country have reached US$ 3.5 billion so far this year.
“We are perfectly able to contribute for Saudi Arabia to be successful in its project of ensuring its population’s food security,” claimed the Brazilian minister of Development, Industry and Foreign Trade, Miguel Jorge, during the event. He also highlighted the Arab country’s role in Brazilian exports. “Saudi Arabia is now our leading partner in the Middle East. We really need to diversify our export basket.”
In order to kick off this diversification process, Miguel Jorge will head a new delegation of Brazilian businessmen to Saudi Arabia in early December this year. “We have a mission of attracting Saudi investment in oil, energy, infrastructure, ports, airports etc. I believe that there are good opportunities, especially for large foreign funds to invest in these projects. Few are the countries that offer as many investment opportunities as Brazil does,” he said.
To Salim Taufic Schahin, the president of the Arab Brazilian Chamber of Commerce, this is one of the most important Saudi missions to Brazil ever. “The mission is structured out, they are willing to invest, Brazil is on the Saudi radar and I am certain that after this mission, lots of business deals will go through.”
Célio Porto, the International Agribusiness Relations secretary at the Brazilian Ministry of Agriculture, Livestock and Supply, claimed that Brazil is one of a few agricultural borders in the world that may be expanded. “Brazil is a country with great opportunities in agriculture, but it needs capital, because it does not possess abundant financial resources.” To him, there is a convergence among Saudi and Brazilian interests. “In our understanding, Brazil is capable of generating food security to the world.”
To Carlos Leopoldo, head of the Middle East Division at the Brazilian Ministry of Development, Industry and Foreign Trade, Saudi Arabia should regard Brazil as a partner to guarantee its food security. He claimed that he also expects help from the Arab country for the conclusion of the free trade agreement between the Mercosur and the Gulf Cooperation Council (GCC, comprised of Kuwait, the United Arab Emirates, Saudi Arabia, Qatar, Oman and Bahrain).
The Saudi delegation will stay in São Paulo until Wednesday (6th). In the meantime, it will visit sectorial organizations, meet with Brazilian exporters and with the executive secretary of the Ministry of Agriculture, Gerardo Fontelles.
*Translated by Gabriel Pomerancblum
