São Paulo – Exports from Brazil to Arab countries amounted to US$ 1.22 billion in July, up 15.6% from July 2013 according to figures supplied by the Brazilian Ministry of Development, Industry and Foreign Trade and compiled by the Arab Brazilian Chamber of Commerce. It was the second straight month of increase in sales to the region, following a five-month spell of decline.
The highlights among the leading target markets were the United Arab Emirates, at US$ 278 million in exports, up 25.5%; and Egypt, at US$ 238 million, up 84% from July 2013.
Regarding the Emirates, the Arab Chamber’s CEO Michel Alaby noted that the country keeps growing, with “more and more construction works underway,” and therefore needs to meet demand from local population and expatriates, who are the majority, as well as from tourists.
“Egypt, in turn, has a new government, and wants to at least keep its population assured that there are sufficient food supplies,” he said, adding that the country is the leading Arab importer of Brazilian products.
Alaby found the weaker exports to Saudi Arabia to be odd. The country imported the equivalent of US$ 209.6 million from the country, up only 4.2% from July last year. “Saudi Arabia is home to the Hajj, they receive over 2 million pilgrims, and they (the Saudis) stockpile food wildly [in order to meed this demand],” he said.
The Hajj is the annual pilgrimage to Mecca, the holy city of Islam, and will take place in early October this year. “I believe that this month (August) we will see an increase [in exports],” said Alaby, referring to the need to meet the demand from visitors.
The beef industry scenario, however, remains uncertain, the executive says. Arabs rank among the leading buyers of Brazilian poultry and beef, but China’s recent opening to Brazilian beef and the embargo placed by Russia on beef from the United States, European Union, Australia, Canada and Norway should drive up demand for Brazilian product and put pressure on prices.
Just to have an idea, before the embargo was announced, the Russians expanded from 30 to 90 the number of Brazilian meat plants certified to export to their market. The ban came as a response to the sanctions against Russia led by the US and the EU as Moscow gave support to Russian separatists who came into conflict with neighbouring Ukraine’s government.
In July, however, meat was not the leading Brazilian product in exports to the Arab world, sugar, iron ore and soy beans were.
Among the export destinations in the region, it is worth to point out the expressive increase in sales to Libya, Bahrain, Lebanon, Tunisia and Qatar last month.
The increase seen in July, however, was not enough to offset the decline of Arab exports year-to-date. In the first seven months of 2014, exports to the region grossed US$ 7.3 billion, down a little over 4% July-on-July.
Imports
On the other hand, Brazilian imports of Arab products amounted to US$ 887.3 million in July, down 44% July-on-July. Year-to-date, purchases amounted to US$ 6.44 billion, a decline of 11.5% when compared to the first seven months of 2013.
The fall was driven by the decline in imports of oil and oil products.
*Translated by Gabriel Pomerancblum and Rodrigo Mendonça
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