Agribusiness sales from Brazil to Arab countries up

27 de julho de 2016

Exports climbed 27% in volume and only 1% in revenue in the first half, reflecting a widespread drop in international prices.

São Paulo – Brazilian agribusiness exports to Arab countries reached USD 4.167 billion in the first half of this year, up 1% from H1 2015, the Ministry of Agriculture, Livestock and Supply said. The amount exported, however, was up 26.6% to 8.6 million tons.

According to the director of Market Access and Competitiveness at the Ministry’s Secretariat for International Relations, João Rossi, the modest improvement in revenue and the soaring sales volume reflects an overall drop in international prices of agribusiness products.

But Rossi points out a few exceptions where prices increased in a stronger way. A case in point is beef, with USD 562 million in sales from January through June, a 9% increase over H1 2015. The amounted exported grew by 19%.

The performance is partly attributable to the resumption of sales to Saudi Arabia, in the wake of a ban that had been in place since late 2012 and ended late last year. “The country has already become the second leading Arab buyer after the embargo was lifted,” Rossi noted. Egypt is the first by far, with USD 341.4 million worth of imports, up 10.6% from H1 2015.

Another example is maize, whose exports to Arab countries fetched USD 338 million in H1 of this year, up 264% from H1 2015. Over 2 million tons were shipped, a 317% increase.

Rossi pointed out that Brazilian maize exporters took advantage of the appreciated dollar against the real early in the year and brought forward the shipments, since the forecast called for an appreciation of the Brazilian currency throughout the first half, which indeed happened. Besides, there was an increase in global demand and, consequently, an increase in prices, so much so that the Brazilian government brought down to zero the import fees of the product in an attempt to hold down the prices in the domestic market.

At the same time, sales of soy beans from Brazil to the Arab world went down, but shipments of soybean oil climbed. In the case of poultry, there was an increase of volume sold, but a decline in revenues. With sugar, volumes went up more than revenues.

For the rest of the year, Rossi believes that the scenario will still be one of depressed prices, but maybe not so widely. “A crop failure could impact prices in the next few months”, he pointed out. “Still, we don’t expect a raise such as those in previous years”, he added.

Besides the likely continuation of increase of beef sales to the Arab world, with the consolidation of imports by Saudi Arabia, the Mapa’s director believes that Brazil has the conditions to increase shipments of other products to the region, especially fruits. “These are products in which Brazil is competitive and we have been working hard for theirs insertion in the international market”, he said.

In the long term, Rossi believes the country could also take back the share it once held in the region’s dairy market.

*Translated by Gabriel Pomerancblum and Sérgio Kakitani