Commodities Keep Brazilian Exports to Arabs Growing

Trade between Brazil and the Arab countries began the year on the rise. Brazilian exports to the 22 Arab nations rose 24% in terms of revenues in the month of January, when compared to the same month last year, and reached US$ 317.4 million. If the last 12 months are compared to the previous 12, sales rose 44%, reaching US$ 4.09 billion.

The growth percentage obtained in January is above the Arab Brazilian Chamber of Commerce (CCAB) forecasts for the year, between 12% and 13%. Brazilian foreign trade as a whole has risen 28.3%, also above the federal government estimates, 12% for 2005.


“There’s been a structural change in companies. Exports have become strategic and not an alternative to the domestic market,” stated the secretary general of the CCAB, Michel Alaby.


Exporters expected lower rates due to the stronger real against the dollar, a fact that began at the end of last year, and to the high export rates obtained in 2004.


The United States currency began last year at around R$ 2.90, and has currently dropped to around R$ 2.60. Brazilian exports rose 32% in 2004 and sales to the Arab countries, 46%.


“Despite the stronger real, companies are continuing on the foreign market so as not to lose their share,” stated Alaby.


According to the CCAB secretary-general, however, January exports still reflect the contracts that were made at the end of last year, and it is therefore not possible to hope that this percentage will continue throughout the year.


Countryside


A large part of the growth in sales to the Arab countries occurred due to the sales of basic products like chicken meat, beef, coffee, sugar and soy chaff. Commodities, as they are quoted in dollars, are less affected by exchange rate fluctuation than are manufactured products.


Alaby believes that the sales of basic products may help overcome the losses there may be with manufactured products this year if the real continues getting stronger.


Figures supplied by the Foreign Trade Secretariat (Secex) show that sales of chicken, which go mainly to Saudi Arabia, rose 22.5% in January.


Brazilian revenues with cattle beef also rose 25.6% in the month and revenues with sugar in bulk rose 36.3%. Egypt is among the main markets for both of these products. Morocco is also included in the list of large consumers of Brazilian sugar.


The Rank


Among the Arabs, Saudi Arabia was the largest buyer of Brazilian products in terms of revenues. The country imported a total of US$ 79 million, an increase of 73% over the January 2004 result.


Egypt was second, having purchased US$ 59 million, followed by Morocco, with US$ 34 million, and Algeria, with US$ 33 million. The countries that most increased their purchases, in percentage terms, were Algeria (197%), Libya (123%) and Somalia (107%).


Despite the growth obtained in January, exports to the Arabs dropped 7.5% when compared to December last year. “January is not normally a month of extraordinary export growth due to the winter in the northern hemisphere,” recalled Alaby.


Oil from Libya


Brazilian purchases of products from the Arab nations dropped in January when compared to the first month of 2004. Imports sank from US$ 319 million to US$ 284 million, or 10.9% down. This drop may be related to the oscillation of oil prices, as that is the main product in the basket.


The good news in the area of imports is that Brazil is increasing oil purchases from some countries in the region, among them Libya. The Brazilians spent US$ 10.3 million on products from Libya, an oil producer, in January.


In the first month of 2004, the Brazilian trade balance did not include purchases from that Arab country. On the other hand, imports by Saudi Arabia dropped from US$ 83 million to US$ 67 million and those from Algeria from US$ 166 million to US$ 129 million. Both of these countries are large Brazilian suppliers of oil.


Translated by Mark Ament
ANBA ”“ Brazil-Arab News Agency

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