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In Brazil the Arabs Are In and All Seem to Be Cashing In

The growth of exports from Brazil to the Arab countries may exceed 20% this year. The forecast was made yesterday by the president of the Arab Brazilian Chamber of Commerce (CCAB), Antonio Sarkis Jr.

“We have not yet revised our original forecast, but we believe that the growth may be as high as 20%. If we reanalyze the forecast, it will be over 20%,” he said Tuesday, July 26, during a luncheon offered to journalists at the organization’s head office, in São Paulo.


At the beginning of the year, the CCAB estimated that shipments should grow between 12% and 13%. However, in the first half, exports to the region have already generated US$ 2.2 billion, or 18% more than in the same period last year. “And in the second half of the year exports normally rise due to Ramadan,” stated Sarkis.


In the period that precedes the holy month, which is going to be in October this year, Arab tradesmen generally stock products. This is due to the fact that, despite fasting during the day, people meet their families and friends at night to eat. Apart from that, after Ramadan there is a feast period during which it is common to exchange presents.


Space


To Sarkis, despite the presence of Brazilian companies in the Arab market having grown very much in recent years, there is still great space for growth. “The Arab market is one of great potential and the CCAB is working for this,” he said.


So as to exemplify this, he stated that the 22 Arab countries import 90% of all the food they consume.


“Agricultural products already have a good market there, but it is still possible to expand,” he declared.


In the first half of the year, shipments of Brazilian agribusiness products to the region generated US$ 1.4 billion, a growth of 15% in comparison to the same period last year, and over that the national average, which was 10.2%.


In Fashion


Sarkis recalled that last year the Arab market imported the equivalent to US$ 239 billion, with sales to the region totalling US$ 4 billion. That means that participation is still small in a market that has great dependence on imported products.


And this demand is growing as oil prices rise, causing a positive impact on various economies in the region, mainly in the Arabian Gulf, and with the real estate and infrastructure projects that are being developed. “The Arab market is in fashion, and today everybody knows it,” stated Sarkis.


As an example he mentioned the real estate boom in the countries of the Gulf, especially in Dubai, in the United Arab Emirates, where 700 new buildings should go up by 2010.


There is also demand by electric equipment suppliers. The Arab countries in the Gulf are going to build a transmission line to connect their energy systems, at the cost of US$ 1.25 billion.


The electric material sector is, incidentally, among the fields in which the CCAB has identified a great business potential in the region, as is the construction material sector.


Sarkis recalled that in November, his Chamber is going to promote the participation of Brazilian companies in the Big 5 and Index fairs, respectively in the civil construction and furniture sectors, to take place in Dubai.


No Barriers


The president of the CCAB pointed out that contrary to other markets, the Arabs do not impose barriers to the import of Brazilian products.


In the case of the Gulf Cooperation Council (GCC), which includes Saudi Arabia, Bahrain, Qatar, the United Arab Emirates, Kuwait and Oman, the average tariff for imports of all products is no greater than 5%.


Apart from that he recalled that the Mercosur is currently negotiating trade agreements with Egypt, Morocco, and with the GCC itself. “Every time that an agreement like this is signed, trade between the regions involved rises significantly,” he declared.


Sarkis also pointed out that various Arab countries have trade agreements with the European Union and with the United States, which may indirectly benefit Brazilian exporters.


As an example, he mentioned the increase of over 500% in leather exports to Tunisia. There the product is transformed into trousers that are sold to Europe.


Events


He pointed out that part played by the organization of trade missions and participation in fairs to generate growth in exports to the Arabs.


In the first half, the CCAB promoted Brazilian company participation in seven events in the Arab countries. In the same period, two business missions with Arab businessmen came to Brazil.


To Sarkis, the Summit of South American – Arab Countries, which took place in May, and the visit by Brazilian President Luiz Inácio Lula da Silva to five Arab countries, in December 2003, had great influence in the increase of business with the region.


“After the visit by the President there has been a significant increase. Brazilian exports grew 46% in 2004 and the trade flow rose 50%,” stated Sarkis. “The summit was a political event, but closer political ties always favor trade,” he added.


Exchange and Investment


The president of the CCAB also stated that the appreciation of the Brazilian real against the United States dollar in recent months, that supposedly makes Brazilian products more expensive on the foreign market, did not affect trade with the Arab world.


“Companies now have an export culture, knowing that the market must be worked. Companies that have this culture know that they must treat their foreign customer well and may even sacrifice their profitability a little so as to supply the customer and keep him,” he added.


And this relation of trust, in his evaluation, should also be taken to other fields, mainly the investment field. “Investment is the fruit of good trade relations. Nobody invests in a place he doesn’t know,” finished off Sarkis.


Anba – www.anba.com.br

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