Brazil, more than conquering new markets, wants to diversify its exports to countries that are already large importers of Brazilian agribusiness products. It is with that goal in mind that the Brazilian Ministry of Agriculture is going to promote a business mission to Egypt, Algeria and Iran this coming June.
The International Promotion Department at the ministry organized a meeting, this Tuesday, May 6, with companies that intend to be a part of the delegation in the southeastern Brazilian city of São Paulo.
"Those are markets in which Brazil already has good penetration, agriculture-wise. The export basket, however, focuses too much on products such as sugar, meat and corn (in the case of Iran)," said the director of the department, Eduardo Sampaio Marques.
"And they import other items that we are able to supply, but do not sell to them at the volume we could be, such as dairy products, eggs and even coffee," he added.
He claimed that the market share of Brazilian agribusiness products in those three countries is greater than the share on the worldwide market, which is 7%. In Algeria, for instance, Marques informed that Brazil has a 9% market share, but that sugar and meat answer to 80% of total exports. Even in dairy products, for which Brazilian sales have been growing, market presence could be greater.
Marques stated that Algeria imported the equivalent to US$ 630 million in powdered milk in 2006, of which Brazil answered to just US$ 54 million. Last year, Algerian imports of dairy products totaled approximately US$ 1 billion, and the European Union accounted for half that amount.
He listed other products that Brazil could supply more of, such as green coffee (imports of US$ 152 million in 2006), corn (US$ 338 million in imports) and bananas (US$ 53 million in foreign purchases).
In the case of Egypt, Marques highlighted that the country's supermarket sector is growing and that Brazilian agribusiness already has a 14% market share, but once again, it focuses too much on sugar and beef, even though there is space for expanding trade of other products, such as those of the soy complex (imports of US$ 340 million in 2006), corn (US$ 456 million in imports), powdered milk (US$ 105 million in foreign purchases), food preparations (US$ 45 million), apples (US$ 68 million), butter and cheese (US$ 115 million) and rice (US$ 32 million).
The story is the same with Iran, to where Brazilian exports focus on corn, soy and sugar. Even though Brazilian agribusiness has a 43% market share in the country, those three products represent 84% of total exports, even though there is even space for traditional export goods, such as chicken meat.
Marques said that the international food market is quite heated right now, and that it is easier to export to those countries, as they are not self-sufficient in the sector and impose few barriers on imports.
He claimed, however, that the mission's goal is not just to ink isolated deals, but rather to ensure the establishment of long-term commercial relations. This is so because Brazil is still able to greatly expand its food supply.
This is going to be the second action of the ministry turned to the Middle East this year. The first took place in late February, when the ministry and the Arab Brazilian Chamber of Commerce organized the participation of businessmen from Brazil in Gulfood, a food industry trade fair held in Dubai, and they also promoted an institutional mission to Saudi Arabia.
Yesterday's meeting was attended by representatives of companies in the dairy product, egg, cheese, pasta, biscuit and chocolate, beef, fruit, and agricultural commodity sectors, among them several participants at Gulfood.
The secretary general at the Arab Brazilian Chamber, Michel Alaby, who also attended the meeting, claimed that Algeria favors imports of raw materials and semi manufactured products to be used in the country's domestic industry.
He stated that import tariffs on finished goods range from 30% to 45%, and that tariffs on basic and intermediate goods range from 5% to 10%. "There is much space for us to work in Algeria," he asserted.
In the case of Egypt, Alaby said that there is much demand not only for foods, but also for agricultural machinery and equipment. "They also want to sell more to Brazil, and they have fertilizers to offer, for example," he claimed.
Alaby highlighted that Egypt is an export platform to other countries, both inside and outside of the region. The Egyptians maintain a trade agreement with the United States, for example.
The advisor at the ministry's International Promotion Department, Danilo Gennari, stated that Iran is a market undergoing a process of opening up, and that this is the right moment for Brazil to come through as a trustworthy commercial partner.
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