Brazil Shoe Industry Blames Chinese Dumping for Bad Market

Brazilian shoes
Despite a weak footwear industry performance in the first half this year, sector businessmen and representatives are confident that sales will grow in the second half. The economic crisis and the possibility of dumping of Chinese products are believed to be the main causes for the retraction of the industry. Dumping means the selling of products at prices lower than the production cost.

"In the last quarter of last year, we shed 42,000 of 330,000 jobs in the sector. Presently, the footwear industry is still in a delicate situation, and has been making a huge effort to prevent dismissals," says the president of the Brazilian Association of Shoe Manufacturers (Abicalçados), Milton Cardoso.

If, on the one hand, the industry is still in an uncomfortable situation, the wholesale shoe sector, on the other hand, has no reason to complain. The first quarter was weak, but in May sales grew 5.1% over April. "Preliminary data for June show growth rates of 8% to 9%. We believe in a very good second half," says the president of the Brazilian Association of Artefact and Footwear Storeowners, Marconi Leonel Matias dos Santos.

To Milton Cardoso, the Brazilian industry is not taking advantage of the solidity of the domestic market. "There is an inventory of foreign products afloat on the international market, and they are shoring up here in Brazil," he says.

At the request of the Abicalçados, the Brazilian Ministry of Development, Industry and Foreign Trade has filed a case for investigation of dumping by China. "A preliminary survey has shown that the rate of dumping exceeds 400%."

The president of the Federation of Industries of the State of São Paulo, Paulo Skaf, said that the organization is going to adopt a vigorous stance on the matter. He also mentioned the issue of Argentina, to which exports have been limited.

"Over the course of one year, exports from Brazil decreased by 30% and imports grew by 20%. The government must pay attention to this issue, especially if it is dumping-related."

To the superintendent of Sebrae in São Paulo, Ricardo Tortorella, the whole economic crisis has helped the sector to position itself and seek new markets abroad. He corroborates the opinion that the second half will be much better for the sector.

"Shoes mean income. The income of workers is increasing, therefore sales should improve, thus generating further employment and income."

More than 100 people attended the opening event of Francal 2009, a footwear sector trade fair, July 14, in the city of São Paulo. To the president of the fair, Abdala Jamil Abdala, this will be the edition of hope and confidence. "We are very confident in the second half and in the strengthening of the sector," he said.

Sebrae

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