India unseats Brazil in food exports to the League of Arab States for the first time in 15 years.
According to the data provided by the Arab-Brazil Chamber of Commerce to Reuters on Tuesday, this feat comes after the COVID19 pandemic disrupted trade flows in 2020.
About Brazil and Arab Nation trade relations
The Arab world is among Brazil’s most important trade partners, but its distance from those markets took its toll as the pandemic of 2020 disrupted global logistics.
Brazil accounted for 8.15% of the total agribusiness products imported by the 22 League members last year, whereas India captured 8.25% of that trade, ending Brazil’s 15-year advantage, the data revealed.
Despite remaining competitive “from the farm gate in”, Brazil lost ground to India and other exporters such as Turkey, the United States, France and Argentina amid a disruption of traditional shipping routes.
Causes of downfall
Brazilian shipments to Saudi Arabia that once took 30 days could now take upto 60 days, according to reports by the Chamber of Commerce. Whereas India’s geographic advantage allows it to ship fruits, vegetables, sugar, grains and meat in as little as a week.
Chamber of Commerce data reveals
Data shows, Brazil’s agricultural exports to the Arab League rose just by 1.4% by value to $8.17 billion last year. Between January and October this year, sales totaled $6.78 billion, up 5.5%, as logistics problems subsided.
Other probable causes for Brazil’s downfall
China’s push to boost its own food inventories during the pandemic also diverted some of Brazil’s trade with the Arabs, leading countries such as Saudi Arabia to step up the promotion of domestic food production while seeking alternative suppliers.
“It’s a turning point. The Saudis are still big buyers, but they are also net re-exporters of food,” the Chamber said in a statement.