Brazil gains export sales to Arab countries after mass vaccinations reopen economies

RIO DE JANEIRO, BRAZIL – Mass vaccination against Covid-19 in Middle Eastern countries, with the reopening of the local economy, is beginning to benefit Brazilian agribusiness. After growth of less than 2% in shipments to the Arab League throughout last year, in the first quarter 2021 the increase in sales reaches 8.7% compared to the same period in 2020, to US$1.78 billion.

Tamer Mansour, secretary-general of the Arab-Brazilian Chamber of Commerce, points out that the United Arab Emirates, Bahrain, and Saudi Arabia, in particular, have been active in vaccine purchases. In addition, they imposed controls on entry into the country and conducted extensive testing of the population. This led to a reaction from the food service sector, the most affected at the beginning of the pandemic, and to the resumption of sports and business events.

“Vaccination shows immediate results in the increase of relations between these countries and the world,” says Mansour. He expects Brazilian agribusiness exports to Arab countries to be up to 5% higher this year.

On the rise

The export of grains from Brazil to the Arabs more than doubled in the first quarter, driven by demand for feed, purchases to ensure supply and consolidation of regional export hubs to nearby markets. According to Mansour, soybean exports grew 148%, and corn, 133%. Even non-traditional items for that market, such as cotton, increased their share from January to March.

Recovery

The Chamber also expects chicken and beef exports to reach US$2.94 billion, similar to the 2020 result. But Mansour believes that exports have the potential to outperform last year. In addition to increased consumption with the economic recovery, the plan to nationalize production will take “longer than expected” due to imports being the cheapest option at the moment.

Diversifying

The organization also expects the first shipments of Brazilian mutton to Saudi Arabia, the United Arab Emirates and Bahrain this year. “There is demand and the national plan for breeding and slaughtering sheep is more modernized and adapted to the sanitary and regulatory issues of these countries,” says Mansour. Another focus is to promote the sale of food products with higher added value, leveraging the country’s tradition in halal production (suitable for Muslim consumption).

Precaution

The Brazilian corn ethanol industry was decisive for Novozymes’ sales to jump 21% in Latin America in the first quarter. The company is a world leader in biological solutions and enzymes for biofuel production. Maximiliano D’Alessio, director of operations at Novozymes BioAg, says that the demand for enzymes followed the expansion of the plants’ production capacity.

Moreover, he believes companies may be stocking the raw material to ensure the supply of ethanol in case of logistical constraints due to the pandemic. “I don’t recall a result like this in the past eight quarters,” he says.

Latin America, along with the Asia-Pacific, sustained the company’s 3% global growth in the quarter, according to D’Alessio. In 2020, the region contributed 9% of Novozymes’ US$2 billion revenue. D’Alessio says that the result is also influenced by a more focused strategy in the commercial area and not only in technology, implemented by the CEO, Ester Baiget, when she joined the company in February 2020. In 2021, the goal is to maintain global growth of between 2% and 6%, and to advance double-digit growth in Latin America.

We have bananas

The exports of Leiria group, national leader in the sale of regular banana, have skyrocketed this year. The United States, Qatar, Portugal and Spain, which imported 3,700 kilos last year, have now bought 22,100 kilos between January and April. The volume shipped abroad should increase further with the expected opening of the Arab Emirates, Russia, Italy, and France’s markets. Vanessa Correia, the group’s director, credits the result to global economic upturn, planting issues in other countries, and “strict” control of the production process. “We follow all international regulations,” she assures.

Last year, regular banana exports contributed 10% to the group’s revenue. This year, the projection is that this share should increase to 40%. Leiria is currently HACCP (Hazard Analysis and Critical Points) certified and is working to obtain two more: ISO 22000, on food safety management, and Kosher, which ensures products suitable to the orthodox Jewish diet.

With more consumers looking at food’s origin, the Genesis Group from Paraná has seen the demand for its services grow, ranging from inspections and analyses to certifications and traceability in the agribusiness chain. The company expects to inspect over 75 million tons of grain by the end of the year, compared to 70 million tons in 2020, says Nelson Bechara, CEO of Genesis. In revenue, it should grow 15%, to about R$200 million.

No delays

To offer more automated and intelligent services, Genesis has allied itself with agtechs (agribusiness startups). Last week, it inaugurated Mitra, an innovation hub within the AgTech Garage in Piracicaba (SP). Two digital solutions resulting from this partnership should be on the market by the first semester, along with another in the second, says Bechara. Together, the technologies demanded over R$2 million in investment, of the R$5 million planned for innovation this year.

Source: Estadão