Brazilian trade with Arab countries improving in the first half of 2019

Arab countries are still demonstrating themselves to be relevant trade partners with Brazil in the first half of 2019, according to a report made available by the Arab Brazilian Chamber of Commerce through several sources.

Arab countries are now the third-largest import market for Brazil with China and the US occupying, respectively, the first and second spots as importers of Brazilian products. Poultry, iron ore, sugar and beef cover approximately 65% of the total exports to Arab countries. The largest importers are the UAE, Saudi Arabia, Egypt, Algeria and Oman.

On the other hand, mineral fuels (64%) and fertilizers (23%) are the main products that Brazil imports from Arab countries. Saudi Arabia and Algeria are the main exporters of products to Brazil, apart from Morocco and the UAE.

As a result of the positive development signaling the important role of Arab countries as trade partners as well as investors in Brazil, the government of the Brazilian state of Sao Paulo is planning to open an office in the UAE (particularly in Dubai) in an eff ort to attract investments in infrastructure projects in Sao Paulo.

It is also worthwhile for foreign investors to learn that Petroleo Brasileiro (Petrobras) has entered into the so-called Term of Cessation of Conduct (TCC) related to Petrobras’s activities in the natural gas market with the Brazilian antitrust authority, the Administrative Council for Economic Defense (Conselho Administrativo de Defesa Economica).

According to the TCC, Petrobras shall leave the transportation and distribution segments, as a whole, by selling all its interest in the following companies:

(a) Nova Transportadora do Sudeste – 10%

(b) Nova Transportadora Associada de Gas – 10%

(c) Transportadora Brasileira Gasoduto Bolívia-Brasil – 51%, and

(d) all 20 local distribution companies (LDCs) in which Petrobras holds interest in, either by selling a 51% stake in Petrobras Gas (Gaspetro) or by directly selling LDC shares.

The IDB already has a presence in South America, particularly in the Co-operative Republic of Guyana. Guyana has been an IDB member since 2016 and the government of Guyana is opening up to Islamic financing.

It is a fact that approximately 7% of Guyana’s population are Muslims and this percentage is certainly higher than in two major countries in South America — Brazil and Argentina. However, maybe this is a good opportunity for both Brazil and Argentina to forge a closer relationship with the IDB.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.