Lower Brazil Risk Means the Best Conditions Ever for Export Money

Brazil has never had so many resources available in its financial system for financing foreign trade. The information was disclosed by executives of Bradesco and the Brazilian Central Bank, the country’s two largest banks, at the 26th National Foreign Trade Conference (Enaex), which ended this Friday, December 1st, in Rio de Janeiro.

"We have never had this many lines available, with never before seen costs and deadlines," said the executive manager of Bradesco, José Luiz Meschiatti.

"We have deadlines of up to ten years, which would be unthinkable a few years ago," he added.

Along the same lines, the Central Bank vice-president, José Maria Rabelo, claimed that the resources available are more than sufficient to cater to the demand. Together, the two banks operate approximately 50% of the Brazilian foreign trade financing market.

Rabelo points to two factors that led to the availability of capital. "This year there is a greater liquidity in the global market than there was last year, and the perception of risk regarding Brazil has decreased as well," he said. Rabelo estimates that export financing contracts in Brazil should surpass US$ 40 billion this year, imports not included.

Both Meschiatti and Rabelo said that the destination markets for the financed goods reflect the overall situation of Brazilian exports. "And Brazil virtually exports to the whole world," said the executive from Bradesco.

Operations financed by Bradesco alone reached US$ 13 billion from January to September, US$ 900 million of which consisted of resources from the Brazilian Development Bank (BNDES). According to Meschiatti, the amount for 2003 was US$ 6.4 billion.

In the case of the Brazilian Central Bank, the two most common export financing contracts amounted to US$ 11 billion from January to November, plus US$ 860 million in the export pre-payment category. Export exchange contracts by the Central Bank, which include financing contracts, amounted to US$ 35.9 billion, 16.1% more than the same period last year.

Import financings by the Central Bank reached US$ 4.5 billion in 2006, an 80% increase compared with the same period in 2005. "This year saw a greater focus on import financing," Rabelo said. This year, with the appreciation of the real (the Brazilian currency) relative to the dollar, foreign purchases increased more than foreign sales, despite the fact that the country’s balance of trade is currently at US$ 41 billion. Import exchange contracts reached US$ 18.9 billion, 31.2% more than in the first 11 months of 2005.

Rabelo also said that exchange operations made entirely on the Internet amounted to US$ 2 billion until November, and that 656 companies are qualified to do this type of operation. At the Enaex, another 40 companies enrolled at the Central Bank stand to qualify for the service, which became commercially operational in the second half of the year.

Debates

On the last day of Enaex, in addition to foreign trade financing, the issues of commercial promotion, companies’ internationalization, exchange policy modernization and tax burden reduction were also discussed.

According to Benedicto Fonseca Moreira, president of the Brazilian Foreign Trade Association (AEB), which organized the event, the proposals presented during the conference will be systematized, and then forwarded to the government.

"The event served to raise and discuss issues and to collect suggestions from businessmen, in order to set up a positive agenda of necessary measures to strengthen foreign trade," he told ANBA. According to the organizers, approximately 1,700 people attended the event, which was held at Hotel Glória.

The companies and organizations sponsoring the Enaex had stands at the event, including the Arab Brazilian Chamber of Commerce. The Chamber stand was visited by businessmen, government officials and students interested in the services offered by the organization, as well as in the Arab countries.

Many of the visiting businessmen were interested in knowing how to export to the Arabs merchandise such as granite, fashion items, cosmetics, shoes, food, beverages and construction material.

AEB also granted the 2006 Foreign Trade Highlight Award to the following companies: Petrobras, Friboi, Copersucar, Weg Motores, Tramontina, Ganatus Equipamentos Médicos e Odontológicos, Maratá Sucos, Tecsis – Tecnologia e Sistemas Avançados, Vale do Rio Doce, Frigorí­fico Bertin, Itaú, Banco do Brasil, Embraco, Gerdau and Camargo Correa.

Anba – www.anba.com.br

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