São Paulo – Brazilian exports to the Arab countries were down 10% year-to-date through April this year from the same period last year, as per figures from the Brazilian Ministry of Development, Industry and Foreign Trade compiled by the Arab Brazilian Chamber of Commerce. The 10% decline took place in both revenues and shipped volume. In April, export revenues were down 9.57%, but shipped volume was up 11.5%.
However, figures are expected to improve from May onwards, since this year the Ramadan will happen earlier, in June, says the Arab Chamber CEO Michel Alaby. “They are building stockpiles,” says the executive. Ramadan is the holy month, when Muslims fast during the day, but can eat once the sun sets, and they usually do so in collective meals and family meetings.
Year-to-date through April, Brazil grossed US$ 4 billion in export revenues to Arab countries, as against US$ 4.5 billion in the same period of 2013. Shipped volume dropped from 12.4 million tonnes to 11.2 million tonnes. In April alone, revenues from export to the Middle East and North Africa stood at US$ 1 billion, as against US$ 1.1 billion in April 2013. Shipped volume was up from 2.4 million tonnes to 2.7 million tonnes.
The good news regarding the trade balance during the period include higher shipments of iron ore, in April, and of meats, year-to-date. In both cases, however, revenues declined, a sign that prices have dropped. “The prices of some of the top commodities are on the way down, and domestic demand for protein is strong,” says Alaby.
Brazil is facing a few difficulties when it comes to exporting beef to some of the Arab countries, which have embargoed imports of the product due to the announcement, made in 2012, that one animal bearing the mad cow disease causative agent had died in the state of Paraná. THe animal, however, did not die as a result of the condition, which it did not develop. This year, another atypical case of the disease was reported in Mato Grosso, and two Arab countries, Egypt and Algeria, banned imports from the state for 180 years.
Nonetheless, the CEO claims there is room for Brazilian new protein suppliers in the Arab market, such as poultry companies. He also notes that the FIFA World Cup, which Brazil is hosting from June 12th onwards, may open up new vistas for exports. During the tournament, Arab importers will travel to Brazil to look into business opportunities and watch the matches, via a joint action from the Brazilian Export and Investment Promotion Agency (Apex) and the Arab Chamber.
Year-to-date through April, among the four leading Arab importers of Brazilian products, two increased their purchases in 2014 from 2013: Egypt, up 18%, And Algeria, up 43%. Egypt ranks third among the leading Brazilian export targets in the Arab world; Algeria ranks fourth. Saudi Arabia, which tops the ranking, imported 24% less product, and the United Arab Emirates, which ranks second, stepped down its purchases by 13.5%.
Revenues from exports of processed goods, including sugar, were down 24.5% year-to-date through April, and revenues from animals and products, including meats, were down 6.9%. These were the main categories of products shipped from Brazil to the Arab countries. Sales also dropped for mineral products, including ores, and plants and products, including cereals.
Imports
Brazilian imports of Arab products also dropped year-to-date through April this year from the same period in 2013, from US$ 3.4 billion to US$ 3.3 billion. In April, however, imports increased from US$ 960 million in 2013 to US$ 1.03 billion this year. Brazil imports mostly oil and its products and fertilizers from the Arab countries.
*Translated by Gabriel Pomerancblum
Comments