Commercial Relations: Brazil and the Middle East
In recent years, Brazil has developed a policy of rapprochement with countries of the Middle East. Among the topics of interests, economic issues were certainly a priority.
In the last decade various aspects of international relations between Brazil and the countries of the Middle East has been inaugurated. The new Brazilian foreign policy which involves the Middle East region of the globe meet not only political aims, but also economic interests.
Brazilian Rapprochement
The policy of rapprochement with the Middle East was launched and with it the Brazilian participation in the Middle East increased a lot with:
- highest number of presidential visits accompanied by business missions
- constant participation of Brazil in international business conferences and exhibitions
- brazilian economic growth, which has attracted foreign eyes for trade and investment in Brazil
- existence of a certain complementarity between the economies of Brazil and Middle East countries
Trading Situation
The Middle East can be seen as an important market in expansion to Brazil as well as a major trading partner, being one of the main suppliers of oil and gas to Brazil. The importation of these products is fundamental to the country since the national demand for it is increasing.
It is not only the imported products that have caught the attention of the Brazilian government and business people. The Middle East is a rich region of the world, with social inequalities, but with a huge abundance of wealth. The countries in this region are large consumers of Brazilian agricultural products and therefore have a purchasing power that is very tempting to Brazil.
Complementary Economies
As we can see the Middle Eastern countries and Brazil have complementary economies: one having huge potential to sell energy and fuel products and needing agricultural goods, and the other wanting to expand their exportation market and needing to buy the energy and fuel products.
The market between these economies is being explored, but it still has the capacity to grow. The trade between these two regions increased significantly from 4.9 billion of USD in 2002 to 25.1 billion USD in 2012, showing that the possibilities for this commercial relationship seems to be more and more positive for both economies.
Balance of Trade: Brazil and Middle East
| Year | Importation (million USD) | Importation (%) | Exportation (million USD) | Exportation (%) |
| 2012 | 3,976 | 3.5 | 4,724 | 4.1 |
| 2013 | 3,826 | 3.4 | 5,066 | 4.4 |
Purchasing Power from Middle East Countries
As already mentioned, the Middle East is a region characterized by countries with a high-level of purchasing power. Between these countries the ones that present the highest purchasing power are:
- United Arab Emirates (UAE)
- Saudi Arabia
- Bahrain
- Oman
- Kuwait
- Qatar
All of the above countries are members of the Gulf Cooperation Council (GCC). The consumer market in these countries is constantly growing and is very appealing to Brazil. It will generate opportunities for Brazilian companies from various countries.
The Largest Exporters
From the total number of exports executed by Brazil, 6% of them are designated to the following countries:
- Saudi Arabian
- UAE
- Egypt
In 2011, Brazil exported 3,476 billion USD to Saudi Arabia. The main products were frozen chicken – 824,034 million USD – iron ore – 791,193 million USD – and raw cane sugar – 458,220 million. While importation from this same country totaled 3.093 billion USD, the main products being crude oil – 2,690 billion USD –, naphtha for petrochemical – 111,061 million USD – and other liquefied propane – 80,877 million USD.
Brazilian exports to the UAE in 2011 totaled 2,169 billion USD. The main products sold were types of sugar cane, beets, sucrose – 483,494 million USD –, cane sugar in the raw – 353,667 million USD – and iron ores – 300,475 million USD.
In the same period, Brazilian imports from UAE accounted 478,672 million USD with an emphasis on aviation kerosene – 265,784 million USD –, sulfur in bulk – 59,709 million USD – and types of propane gas – 54,343 million USD.
What is exported?
The main groups of products exported by Brazilian companies to Middle East countries, according to Global Trade Information Services (GTIS), are:
- sugar and alcohol
- chicken and beef
- mineral products
- vehicles and parts of vehicles
- grain, cereal and soy (grain and oil)
- machines and engines
- metallurgy products
- airplanes
Importation Activity
The Middle East countries that import most products to Brazil are mentioned below. They correspond to a percentage of 5.2% of the total number of Middle-eastern imports to Brazil:
- Qatar
- Saudi Arabian
- Bahrain
Products from Middle East
| Main Imported Products Derived from Oil (2011) | Quantity (millions of m³) |
| Diesel Oil | 9.3 |
| Naphtha | 7.1 |
| Coking Coal | 4.4 |
| Liquid Pretroleum Gas (LPG) | 3.4 |
| Gasoline | 2.2 |
| Aviation Fuel (known in Brazil as QAV) | 1.8 |
| Fuel Oil | 0.7 |
| Lubricating Oil | 0.7 |
| Solvent | 0.4 |
| Asphalt | 0.1 |
Trade Mission: Going to Dubai
A delegation of 47 companies, led by the Ministry of Development, Industry and Foreign Trade – MDIC – and organized by the Brazilian Agency for Promotion of Exports and Investments – Apex-Brazil, went to Qatar, Saudi Arabia and United Arab Emirates in February of 2013 on a business trip. The main target of the trip was to expand the commercial relations between Brazil and the countries mentioned.
After 503 meetings with 232 potential buyers from UAE, Saudi Arabia, Oman, Bahrain, Qatar, Kuwait, Jordan and Lebanon, 26 Brazilian companies closed deals. The companies were from the sectors of home, construction, food and beverages and the trip ended with a total of 47.3 million USD in business agreements.
In Dubai, Apex-Brazil signed four Memorandums with the UAE to expand trade relations between the two countries.
Legal Agreements: Brazil and Middle East
The Brazilian Arab Chamber of Commerce acts as an important facilitator for the information exchange between Brazilian business people and middle-eastern business people. The investment institution establishes bridges between them. The promotion of trade and investment in Brazil is also coordinated by MDIC and by Apex-Brazil.
Business Agreements
- Brazil-Qatar: Agreement to Avoid Double Taxation of Profits of International Air Transportation.
- Brazil-Qatar: Agreement on Economic Cooperation and Trade.
- Agreement between Qatar Holding LLC and BNDES, Vale and Welfare Fund for Staff of the Bank of Brazil.
- Brazil-Kuwait: Amendment to the Economic Cooperation Agreement.
- Brazil-Bahrain: Agreement on Economic and Commercial Cooperation.
- Brazil-Bahrain: Agreement for the Promotion and Protection of Investments.
- Brazil-Bahrain: Memorandum of Understanding for Cooperation between the Chamber of Commerce and Industry of Bahrain and Brazil.
- Brazil-Israel: Agreement for the creation of a free trade area between the Mercosur and Israel.
- Brazil-Israel: Signature of the final document of the Free Trade Agreement Mercosur-Israel.
- Agreement on Economic Cooperation between States Parties of MERCOSUR and Member States of the Cooperation Council for the Arab States of the Gulf.
- Brazil-Jordan: Agreement for Commercial and Economic Cooperation between the Government of the Federal Republic of Brazil and the Hashemite Kingdom of Jordan.
- Brazil-Jordan: Agreement between MERCOSUR and Jordan to the creation of a free trade area.