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Arab states, a potential market for the agribusiness in Brazil

The Arab League is an organization of Arab countries founded in March 1945, in Cairo, to reinforce and coordinate economic, social, political and cultural bonds among its members and to reduce competitions among them. Currently, the Arab League has 22 countries as members, from the Middle East and Northern Africa, totaling more than 400 million people.

 

Due to its young population and birth rate at roughly 2%, higher than in developing countries, such as Brazil (where the population growth rate is below 1%), the region needs to assure favorable conditions to food security.

 

These countries have conditions of soil and weather that limit their capacity to produce food in sufficient amount to meet their population, which makes them dependent on importing food. Over the last years, the region has faced important transformations and some countries, such as the United Arab Emirates, have presented an important lead role in terms of both politics and economics, and on the technological development of the region.

 

One of the objectives of the Arab League is to encourage trades of interest with other countries. There are expectations that these countries are willing to accelerate investments to stimulate the economic growth in the region. In this case, Brazil is an important player to provide food for Arab countries, because it is one of the few countries in conditions to increase the planted area.

 

These 22 countries of the League are major importers of food and beverage products – in 2017, the Arab League bought 100 billion USD in products from the international market. Its commercial relationship with Brazil has strengthen over the last years and, in 2017, trades with these countries totaled 20 billion USD. Brazil obtained more than 13.5 billion USD with exports to Arab countries, while it spent 6.5 billion USD importing products from that region.

 

From the total exported by Brazil, more than 70% are products from the agribusiness, putting the region in the third place among the most important destinations of the sector, only behind China and Europe. Sugar and meat are the highlights in the imported products by the Arab League – together, they represent more than 60% of Brazilian products imported in 2017.

 

Still, these countries have also imported higher added-value products, such as textile. There is an interest of the Arab community to intensify the purchase of Brazilian products. As a result, there is room to encourage sales of products that Brazil is the major world exporter, such as mango, papaya, melon, grape, banana, orange, orange juice, coffee and grains.

 

Brazil and other countries in the region have good relations, both commercial and institutional. Considering the importance of commercial relations of Brazil with the Arab League and the fact that they are willing to intensify investments in infrastructure and logistics, commercial policies may be established, taking into account the gains of these trades for both, and respecting different beliefs and habits.

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