In 2007, exports from Brazil to the Arab countries should continue to grow more than Brazilian exports as a whole. According to a forecast made by the president of the Arab Brazilian Chamber of Commerce, Antonio Sarkis Jr., sales should increase 15%, while the Brazilian Ministry of Development, Industry and Foreign Trade estimates a 10.5% growth in the country's total foreign sales.
"Our forecast is a quite realistic one, since it is based upon a large export basket, but it is also quite optimistic compared with the estimates of the Ministry," said Sarkis.
The fact is that sales to the Arabs increased above the national average over the last three years. In 2006, for instance, according to data published yesterday by the Chamber, exports reached US$ 6.67 billion, 28.13% more than in 2005. Total exports from Brazil increased 16.2% last year.
As a result, in 2006 the Arab countries accounted for 4.8% of Brazilian exports, second only to the United States, Argentina and China. Since 2000, Brazilian exports to Arab nations have increased 345%.
The main goods exported to Arab countries last year were sugar, chicken meat, cattle beef, iron ore, aircraft, calcinated alumina, soy chaff, coffee, motored chassis for microbuses and caterpillar tractors.
According to Sarkis, some of the factors that influenced the performance in 2006 were the price of commodities such as sugar and iron ore, in addition to the entry of high added value products into the export basket, such as aircraft.
But Sarkis said that price was not the only factor that led to revenues from these commodities. In the case of sugar, for instance, there was an increase in the amount exported, from 6 million tons to 6.4 million tons.
Agribusiness
"Agribusiness products answer to two thirds of exports to Arab countries. These countries account for 9% of Brazilian agribusiness exports, and 11% of their imports in the sector come from Brazil," Sarkis claimed.
According to information supplied by the Ministry of Agriculture, sales of agricultural products to the Arabs amounted to US$ 4.4 billion, a 28% increased compared with 2005. "The increase was much higher than the national average," he said. Overall, foreign sales in the sector saw a 13.4% increase in 2006.
Brazilian agribusiness exports in general grew 99% between 2002 and 2006. They rose from US$ 24.8 billion to US$ 49.4 billion, according to figures supplied by the Foreign Relations Secretariat at the Ministry of Agriculture, Livestock and Supply.
The sugar and alcohol complex posted the greatest growth in foreign sales, 243%. Meats were in second place, with 170% growth. In the third place came coffee, with growth of 143%. After that came cereals and concoctions, 123%, and fruit, with 91% growth. This information was supplied by the ministry press department.
Back to the Arabs, exports of products other than basic goods also grew; there was significant increase in sales of higher added value products. Refined sugar, for instance, was the main item in the export basket.
Other examples include industrialized cattle beef, industrialized chicken meat, orange juice, threads, fibres, yarns and textiles, soluble coffee, wooden goods, condensed milk and gelatins.
According to Sarkis, despite the fact that Brazilian agribusiness has already consolidated itself as a supplier to the Arab countries, there is still room for growth.
"In the case of fruit juices, for instance, exports saw a 90% increase, but the amount sold still isn't significant," he said.
"Dairy products began showing up in the export basket as well, but they can improve and yield better figures," he claimed.
Sarkis named other industrialized foods, such as sweets, cakes and biscuits, as examples. Syria might soon open up to meat imports too.
Potential
But the agriculture and food sector is not the only one with potential. Sarkis also spoke of other niches to be explored, and stated that the Chamber is already investing in these, such as fashion-related segments (clothing, shoes and cosmetics) and civil construction (building materials, engineering and construction services, decoration, equipment for hotels, and furniture).
"The Chamber believes in these sectors, and has been focusing on them a lot," he said.
In order to illustrate this potential and to ratify the forecast of increased exports in 2007, Sarkis said that the estimates for 2006 indicated US$ 652 billion in exports from the Arab countries to the rest of the world, and US$ 349.2 million in imports. For 2007, exports are forecasted to be US$ 681 billion, and imports US$ 395 billion.
"These figures result in a surplus of approximately US$ 300 billion. Their main export item is petroleum, for which the demand has increased and prices remain high, generating a strong cash flow for Arab countries," said the president of the Arab Brazilian Chamber. "This cash availability translates itself, first of all, in higher buying power, and secondly, in larger investments in infrastructure, housing, hotels etc.," according to Sarkis.
The major destinations for Brazilian exports in the Arab world in 2006 were Saudi Arabia (US$ 1.48 billion), Egypt (US$ 1.35 billion), the United Arab Emirates (US$ 1.04 billion), Algeria (US$ 456 million) and Morocco (US$ 391 million).
Imports
Imports from the Arab countries amounted to US$ 5.37 billion, a 1.08% increase compared with last year. "The import basket is comprised mainly of oil and derivatives, so it oscillates," Sarkis claimed. He called attention to the fact that, in 2006, Brazil became self-sufficient in oil.
To Sarkis, this does not mean that Brazil will stop buying oil and derivatives from the Arabs, but the Chamber will seek to promote other products from the region that might be traded in larger amounts in Brazil, such as fertilizers, pharmaceutical products from Egypt, carpets from Saudi Arabia and textiles. "We will try to keep the trade balance stable," he declared.
Brazil's major suppliers among Arab countries in 2006 were Algeria (US$ 1.97 billion), Saudi Arabia (US$ 1.61 billion), Iraq (US$ 596 million), the United Arab Emirates (US$ 346 million) and Morocco (US$ 329 million).
2007
Among the factors that have been boosting the growth of trade between Brazil and the Arab countries is the organization of trade promotion activities by the Arab Brazilian Chamber of Commerce, including participation in trade fairs in Brazil and in the Arab world. Intensifying these activities is one of the organization's priorities for 2007.
"We are already scheduling at least two trade delegations, in the first half to North Africa and another to the Gulf," said yesterday (10) the president of the Arab Brazilian Chamber, Antonio Sarkis Jr. Two other missions are also being planned, one specifically to Saudi Arabia and another to the region and turned to the fashion sector.
The organization is also planning participation in 16 fairs in the Arab world and in Brazil, with two including buyer projects in the construction material and food technology sectors. The buyer projects will be developed in partnership with the Brazilian Export and Investment Promotion Agency (Apex). Projects like these include bringing foreign importers to Brazil to do business.
"We must show the potential of both parties, of Brazil and of the Arab countries," stated Sarkis. Among the sectors contemplated by these events are the shoe, furniture, construction material, auto parts, hotel, food technology and hospital equipment sectors.
The first event will be the 34th International Shoes, Sportsgoods and Leathergoods Fair (Couromoda), to take place next week in São Paulo, where the Arab Brazilian Chamber is going to have a stand to aid Arab importers and Brazilian businessmen interested in selling to the Middle East and North Africa.
Still this month, starting on the 24th, the Arab Brazilian Chamber is going to participate in Khartoum International Fair, in Sudan, which is multisectorial. The organization is also scheduled to participate in fairs in Egypt, Qatar, Libya, the United Arab Emirates, Algeria and Syria. Some of the events, however, are yet to be confirmed.
According to Sarkis, the organization of commercial promotion actions in Iraq and Lebanon is also being considered. In the latter case, the organization is analyzing the possibility of participating in a fair turned to the reconstruction of Lebanon.
Diplomacy
In the political area, Sarkis believes that the free trade agreement that the Mercosur, the economic bloc that includes Brazil, Argentina, Paraguay, Uruguay and Venezuela, is negotiating with the Gulf Cooperation Council (GCC) should provide a further impulse to trade. "Brazil already has regular relations with the countries of the Gulf, which are important buyers and present a great potential for investment and purchases," he said.
Part of the treaty should be signed during the Mercosur Summit, to take place at the end of next week, in Rio de Janeiro, and the final text of the agreement should be signed at the GCC Summit, in June, according to forecasts by the Brazilian Foreign Office (Itamaraty). The GCC includes Saudi Arabia, Bahrain, Qatar, the United Arab Emirates, Kuwait and Oman.
In the cultural area, the organization plans to release an on-line version of the Arab-Portuguese dictionary developed by professor Helmi Nasr, international relations vice-president at the Arab Brazilian Chamber, and to publish the second edition of book "New World in the Tropics", by Gilberto Freyre, translated into Arabic by Nasr. The Chamber should also inaugurate a Study Center, turned to those interested in learning more about the relations between Brazil and the Arab world.
The number of activities scheduled for 2007 is greater than that for 2006, when the organization participated in 11 fairs and promoted four trade delegations. Most of the events took place in partnership with the Apex. "The Apex is our main partner. The agency has made a great contribution to improving ties, the Arab market is one of the most benefited," stated Sarkis.
Among the events promoted last year was participation in Khartoum Fair, in a fair in Jordan, in Cairo International Fair, in a trade delegation to Abu Dhabi and Dubai organized in partnership with the São Paulo state branch of the Civil Construction Industry Association (Sinduscon), another organized in partnership with the Federation of Industries of the State of Santa Catarina (Fiesc) to the Emirates, Qatar and Kuwait, and fairs in the auto parts, hotel, furniture and construction sectors in Dubai, in Algiers International Fair, and also the organization of two seminars about franchising in the Gulf.
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