São Paulo – The Arab market is still a small buyer of Brazilian leathers and hides, but it may grow, according to the president of the Confederation of Brazilian Hides and Skins Industries (CICB), Wolfgang Goerlich. Now, the leading importer among the Middle East and North Africa is Tunisia. From January to June this year, the Tunisians purchased US$ 3.2 million in semi-manufactured leather from Brazil. In the same period of last year, the country imported US$ 1.9 million. The goal, according to Goerlich, is to sell more manufactured goods, which cost more, to other countries. However, the unfavourable exchange rate, he says, pose an obstacle to the plans of exporters.
“The Middle Eastern countries have a discrete performance when it comes to leather, but their potential is growing. The CICB wants to increase the industry’s exports, and the goal is to sell more to the Arabs. The Gulf countries (Saudi Arabia, Bahrain, Qatar, Oman, Kuwait and the United Arab Emirates) are important buyers of high-end product. We want to sell finished products, which have higher value,” he claims. The leading importers of Brazilian leather are China (alongside Hong Kong), Italy and the United States. These countries combined have purchased 64.2% of the leather shipped from Brazil from January to June.
According to a survey conducted by the CICB based on figures supplied by the Foreign Trade Secretariat of the Ministry of Development, Industry and Foreign Trade, sales to the United Arab Emirates are low, but grew in the first half over the last few years. From January to June 2009, Brazil sold US$ 44,400 in leather. The figure dropped to US$ 28,400 in 2010 and rose to US$ 59,700 this year. From 2010 to 2011, revenues from sales to the Emirates grew by 110%. In terms of product shipped, the Emirates purchased 1,131 kilograms in 2010 and 1,626 kilograms in the first half of this year, an increase of 43.7%.
Aside from the Emirates, Egypt purchased Brazilian leather this year. Leather imports reached US$ 491,298. In the same period of last year, the African country imported the equivalent of US$ 16.352.
In total, leathers and hides producers sold 20% more to foreign countries in the first half of the year than in the same period of last year, at a total of US$ 1.05 billion. The volume shipped, however, only grew by 3%. The result does not cheer up the manufacturers, who are concerned about the exchange rate.
In June, sales totalled US$ 167.1 million, 18% less than in May, according to the CICB survey. Wolfgang claims that it will be hard to maintain the rate of growth of the first half during the rest of the year. “The products that we shipped in June were the result of contracts signed three months earlier, in March. What we export in July was sold in April, a month that already was very difficult,” says the CICB president.
The main problem for exporters, says Goerlich, is the depreciated dollar. “Except for the mining, soy and oil sectors, for which there is a strong demand in China, the companies that manufacture in Brazil and need to export are having trouble,” he claims. He says that the Brazilian government’s measures for curbing the appreciation of the real only manage to maintain it at current levels, but do not suffice to reduce its value relative to the dollar.
*Translated by Gabriel Pomerancblum
