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Arab Share of Brazil’s Export Market Passes 6%

Brazilian cattle Brazilian exports to Arab countries totaled US$ 4.3 billion in the first half of this year, growth of 4.1% over the same period of last year, according to figures disclosed by the president of the Arab Brazilian Chamber of Commerce , Salim Taufic Schahin. Using the same basis for comparison, total exports from Brazil decreased by 23%.

"This goes to show the importance of exports to the Arab world," said Schahin, during a press conference held at the headquarters of the organization, in the city of São Paulo. He added that global trade as a whole should decrease by 12% due to the financial crisis. Emerging markets, including Arab ones, have been an alternative to exporters in the face of recession in central economies.

The share of the Arab world in Brazilian exports went from 4.56% in the first half of 2008 to 6.15% in the same period of this year. "And they tend to grow more and more," stated Schahin.

"If the coming administrations in Brazil maintain this trend, then relations are going to improve a lot. The country is going to increase its market share among Arab countries," he added, referring to the policy of establishing closer diplomatic and cultural ties that president Luiz Inácio Lula da Silva promotes.

In that respect, Schahin highlighted the fact that the current administration "has taken a very important stance regarding the Arab countries" and that Brazil is currently very well regarded in the region.

"In Doha we were able to grasp the extent to which Brazil is important to the Arab world. It became clear in the conversations that we had," he said, commenting on the Arab Brazilian Chamber's participation in a business meeting held on the sidelines of the 2nd Summit of South American-Arab Countries (Aspa), which took place in late March in the capital of Qatar.

According to Schahin, the Arab Brazilian Chamber's "facilitating role" in the process of introducing Brazilian companies into the Arab market is going to increase.

The president of the Arab Brazilian Chamber held a press conference
Performance in the first half of the year was mainly driven by a 24% increase in exports to Arab nations in North Africa. According to figures supplied by the Arab Brazilian Chamber, shipments to the region totaled US$ 1.63 billion during the period.

The leading destinations of Brazilian goods in the Arab world from January to June were Saudi Arabia, Egypt, the United Arab Emirates, Algeria and Morocco.

Schahin called attention to the fact that the Arab countries suffered less with the crisis, despite the falling oil prices, because they were "less leveraged" than other economies, and that the most significant losses in the region were incurred by sovereign funds that were exposed to foreign assets.

The main items shipped were sugar, meats (chicken and bovine) and iron ore, which answered to 61% of total shipments. According to the Arab Brazilian Chamber, there was also growth of 63% in deliveries of aircraft by the state-owned manufacturer Embraer, whose products ranked third in the export basket.

Agribusiness products, in turn, answered to 69% of the export basket. Sales totaled US$ 2.56 billion, growth of 16% in comparison with the first six months of last year. The share of Arab countries in exports by the sector reached 9.41%.

In addition to sugar and meats, the main agricultural products exported to the Arabs include grain, especially corn, soy and its products (grain, chaff and oil), coffee, industrialized meats, tobacco and live cattle.

Aside from foodstuffs, other highlights were vehicles, semi-manufactured steel and iron products, capital goods, electric material and paper.

On the other hand, imports of Arab products decreased by 61% and totaled US$ 2.04 billion in the first half of the year. The main products imported by Brazil are oil and derivatives. According to Schahin, in addition to falling oil prices in the international market, production increased in Brazil, leading to a reduction in imports.

Thus, Brazil posted a surplus of US$ 2.26 billion in trade with the Arabs in the first six months of 2009, as against a deficit of US$ 1.15 billion in the same period of 2008. It is worth noting that in the first half of last year, the price of oil was increasing steadily, having peaked in July, to then fall as a consequence of reduced international demand prompted by the crisis.

According to Schahin, sales from Brazil to the Arab world tend to continue increasing, whereas imports tend to decrease. He stated that considering only oil reserves already discovered, by 2020 Brazil should export from 1 million to 1.5 million barrels of oil per day.

To the president of the Arab Brazilian Chamber, the trajectory of exports to the Arab world is "sustained and capable of continuing to grow over the years." He said, however, that Brazilian companies "must feel that they are competitive." In that respect, he recalled the issues that exist, such as distance between the two regions, logistical problems and the still-incipient promotion of the "Brazil Brand" abroad.

"We must show ourselves more. We have been weak when it comes to advertising ourselves," stated Schahin, adding that a significant share of Brazilian entrepreneurs is still "scared of international market exposure."

Anba

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