Russians have lost to the Iranians the top post as Brazil’s largest buyer of beef from Brazil. The new reality strengthens the controversial ties between Brasília and Teheran, during the Luiz Inácio Lula da Silva’s administration, which were condemned in the West.
Brazil has sold US$ 61.7 million of beef to Iran in August, making the Middle Eastern country the biggest market for Brazil’s key beef exports for the first time on record, the Association of Brazilian Beef Exporters (Abiec) told the Financial Times.
“Iran has become a very important commercial partner for Brazil; we’ve become much closer over the last few years” said Fernando Sampaio, Abiec’s executive director.
After former president Lula angered Washington last year by holding talks with Mahmoud Ahmadi-Nejad over the Iranian nuclear program, President Dilma Rousseff vowed to take a tougher stance on Iran, particularly on human rights abuses.
However, Ms Rousseff, a former leftist militant and victim of torture herself during Brazil’s dictatorship, has largely disappointed activists for her non-interventionist approach and for keeping silent during the recent Arab uprisings.
Brazil’s beef exports to Iran have increased more than 300-fold in the past decade as fast population growth and greater political stability in the country fueled demand for commodities.
Although Brazil also exports vast quantities of sugar and soybeans to Iran, beef is the principal export, making up about 37% of the value of total shipments to the country in the first six months of 2011, according to data from Brazil’s industry and trade ministry.
“Iran is a particularly good market for Brazil because it buys the more expensive cuts. It also always pays on time,” said Abiec’s Mr Sampaio.
Russia ranked as Brazil’s biggest export market for beef in 2010, but orders have dropped sharply over recent months as a result of its import bans on Brazilian beef due to alleged safety concerns, allowing Iran to take the top spot.
Russia banned imports from 85 Brazilian beef plants in June, complaining of poor farming standards. However, some industry groups claim the embargo is just a way to blackmail Brazil into backing Russia’s entrance into the World Trade Organization.
After reaching 1.07 billion dollars in 2010, Brazilian beef exports to Russia have fallen sharply over recent months and totaled only 52.2 million last month.
Anti-dumping
In order to prevent companies from stocking up on imported goods the Brazilian government says pose a threat to local industry, Brazil decided to implement anti-dumping duties retroactively.
The decision makes good on a promise by president Rousseff to toughen trade barriers to protect manufacturers hurt by a currency rally that’s fueling a surge of imports from China.
Brazil’s Super Real has rallied 40% against the US dollar since the end of 2008, more than all 25 emerging market currencies tracked by Bloomberg.
As a result of the new rules, the government can apply its anti-dumping tax retroactively 90 days before the a preliminary ruling on whether the price of the imported product costs less than it would in its country of origin.
The government added air conditioners and bicycles as well as five other products to a list of goods subject to higher tariffs under the Mercosur trade agreement with Argentina, Uruguay and Paraguay.
The government also announced that it will charge an anti- dumping duty of 743 dollars per ton on a type of steel tube manufactured in China and used by the oil and gas industries.
According to Foreign Trade Secretary Tatiana Prazeres, the government has noted increased imports of these kinds of tubes from China that enter the country under-priced.
“Almost half of the 81 anti-dumping measures taken by Brazil are against Chinese products,” said Prazeres.
CBMM
A consortium of five Chinese companies has acquired a 15% stake in Brazil’s Companhia Brasileira de Metalurgia e Mineração (CBMM), the world’s biggest niobium producer, for 1.95 billion dollars in cash.
Chinese state-owned investment company CITIC Group and Chinese steelmakers Baosteel Group, Anshan Iron & Steel Group, Shougang Corporation and Taiyuan Iron & Steel Group Co, formed a consortium, China Niobium Investment Holdings Ltd, to acquire a minority stake in CBMM from the Moreira Salles family, one of Brazil’s richest banking families.
Brazil holds the largest proven niobium reserves in the world and CBMM is the world’s largest niobium producer.
Niobium is a rare mineral with no replacement, used to strengthen steel and in the production of high-grade steel products such as automobiles, infrastructure construction, oil and gas transmission pipelines, large structures such as bridges, towers and buildings, and aircraft engines.
The 15% stake acquisition by the Chinese consortium comes five months after a group of four Japanese and two South Korean companies bought a combined 15% stake in CBMM for about 1.8 billion dollars in March.
The companies are JFE Holdings, Nippon Steel, Sojitz Corp and Japan Oil, Gas & Metals National Corp and South Korea’s National Pension Service and steelmaker Posco.
The Moreira Salles family will now hold 70% in CBMM, which has annual revenues of around 1.83 billion dollars.
Founded in 1955 and based in Araxá in the state of Minas Gerais in Brazil, CBMM has a mine with over 800 million tons of niobium reserves, and holds 82% of the world niobium market share.
Worldwide demand for niobium recorded an annual growth rate of some 10% from 2002 through 2009, buoyed by growing need for high-grade steel. Demand for niobium is projected to grow faster than the expansion in world crude steel production, CBMM said in a statement.
Brazil holds the largest niobium reserves in the world, followed by Canada and Australia. According to national mining association Ibram, Brazil produced approximately 80,000 tons of the metal, or 96% of total global output last year.
Emirates
Two of South America’s most iconic cities will soon have a faster link to Bangkok when Emirates commences its daily non-stop service to Rio de Janeiro and extension to Buenos Aires from 3rd January 2012.
“Both Buenos Aires and Rio de Janeiro are rightly renowned as world-class leisure destinations as well as important business and trading centers. Our research has shown that there is a high demand for these cities from across our network,” said Sheikh Ahmed bin Saeed Al-Maktoum, Chairman and CEO of Emirates Airline & Group.
“Brazil has been part of the Emirates network since 2007 when we began flights from Dubai to São Paulo. With the country playing host to both the 2014 FIFA World Cup and 2016 Olympics, Brazil will be further catapulted into the world’s spotlight, and we will be in a prime position to transport sports enthusiasts to these renowned events. Meanwhile, our first service to Argentina is a much-anticipated addition to our network which will open important new markets for us,” added Sheikh Ahmed.
“Emirates’ plans to implement services from Dubai to Buenos Aires and Rio de Janeiro will play an important role in increasing tourism, trade and investment between Argentina, Brazil and the UAE, in addition to the airline’s vast global network,” said Carlos Enrique Meyer, Minister of Tourism of Argentina.
“Emirates’ South America network has certainly seen impressive performance over the years. Expanding Emirates’ routes to these remarkable cities underlines the airline’s focus on the region and provides an exciting opportunity for travelers from Thailand,” said Khalid Bardan, Emirates’ Area Manager for Thailand and Indochina.
The Dubai-Rio de Janeiro-Buenos Aires service will be operated by a Boeing 777-300ER aircraft offering eight First Class Private Suites, 42 lie-flat seats in Business and 304 seats in Economy.
Over the last few years, South America has experienced record-paced economic growth, even in the shadow of the global downturn of 2008.
