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BRAZIL COUNTRY PROFILE AND MARKET STUDY
Sub-directorate: Asia and Americas
Directorate: International Trade Department of Agriculture, Forestry and Fisheries
September 2016 Author: Mrs Tshilidzi Sheila Netshiozwi ([email protected])
Disclaimer
The Department of Agriculture, Forestry and Fisheries takes no responsibility for any
action undertaken based on information from this study. This is a desktop study and own research must be undertaken, before decisions are made based on this study
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Table of Contents 1. Introduction .......................................................................................................................................... 3
2. Country facts ....................................................................................................................................... 4
3. Historical background......................................................................................................................... 5
4. Economic Overview ............................................................................................................................ 6
5. Infrastructure ....................................................................................................................................... 7
6. Risk profile ......................................................................................................................................... 10
7. Bilateral, Regional & Multilateral Trade Agreements .................................................................. 11
Brazil has been a WTO member since 1st January 1995. .............................................................. 11
8. Brazil’s Agriculture, Forestry and Fisheries Trade Structure & Product Analysis ................... 12
9. South Africa – Brazil trading relationship in agriculture, forestry and fisheries products ...... 18
Major imports and exports ................................................................................................................... 18
10. Trade & Tariff Policies .................................................................................................................. 20
Measures directly affecting imports into Brazil ............................................................................. 20
11. Agricultural Markets Accessibility ............................................................................................... 22
12. Trade potential analysis ............................................................................................................... 22
13. Conclusion ..................................................................................................................................... 23
Annexure 1 - Trade Potential Index methodology ............................................................................... 24
Annexure II ................................................................................................................................................ 25
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1. Introduction
There has been a major shift from the traditional trade of the developing
countries of the South with the developed countries of the North to a focus on
the promotion of South-South trade. South Africa also views trade with the
other developing counterparts in the South such as South America and Asia as
representing new markets with big growth opportunities. The purpose of the
study is to investigate available trade opportunities for South Africa’s (SA)
agriculture, fisheries and forestry products in one South partner, the Brazil
market.
Brazil is the world‘s 8th largest economy and the most populous country in
South America. Brazil is also one of the world’s strongest emerging
countries, contributing substantially to global growth. Brazil's economy
outweighs that of all other South American countries. However, Brazil’s
economy growth decreased in 2013 and the country went into recession in
2014. Brazil is currently faced with an economic and political crisis. President
Dilma Roussef’s removal from the office following an impeachment vote in the
senate, protests by the president’s supporters against the impeachment and
high level of corruption involving politicians on the state-oil company
Petrobras.
Although characterised generally by poor public services, insufficient
infrastructure, growing unemployment, income inequality, high poverty rate,
high inflation and political corruption, Brazil continues to seek to accomplish
industrial and agricultural growth and development. Notwithstanding the
challenges cited, like the negative economic circumstances from 2013 and the
current political crisis, Brazil, with its large market size (about 200 million
people), is considered a potential attractive trading partner.
4
Brazil’s Agriculture sector contributes significantly to the exports. The main
products produced are coffee, soybeans, wheat, rice, corn, sugarcane, cocoa,
citrus and beef.
To get an understanding of the Brazilian market, a broad outlook of Brazil will
be reviewed to determine factors that could influence trade positively or
negatively in Brazil.
The outline of the study will be as follows: an overview of Brazil’s country facts
and historical background; Followed by a brief look at Brazil’s economic
factors; infrastructural development; risk profile and Brazil’s bilateral, regional
and international trade agreements as these have a direct bearing on trade
and trade related matters.
The last sections are to assist in determining trade potential for South African
products. The analysis of Brazil’s Agriculture, Fisheries, and Forestry
production and consumption to detect self-sufficiency; major imports and
exports; trade and tariff’s structure; market accessibility; and a Trade potential
Index (TPI), are aimed at revealing products with potential to be exported to
Brazil.
Lastly conclusions are drawn from the findings of the study.
.
2. Country facts1
Brazil is a Federal Republic with the largest area (i.e. 8 358 140 km²) and most
populous (i.e. 204 million) country in South America during 2015. The country
is situated in the eastern South America bordering the Atlantic Ocean. Brasilia
is the current capital city of Brazil.
1 CIA World Factbook,2016
5
Brazil has 5 Ethnic groups. White 47%; Mulatto (White combined with black)
43.1, Black 7.6%; Asian 1.1; and Indigenous 0.4%. Portuguese is the official
and most spoken language in Brazil, even though they also use Spanish,
German, Italian, Japanese, English and Amerindian. The most common
religion is Catholic and protestant (Adventist, Christian Assembly of God,
Universal kingdom of God). In Brazil 92% of the population aged 15 is literate.
Brazil falls under the countries with high human development index (HDI)2.
Brazil is ranked 75th out of 188 countries in the human development index with
an HDI value of 0.755 in 2014.
3. Historical background3
Brazil was a Portuguese colony subjected to an imperial mercantile policy for
three centuries until independence in 1882. It had three major large scale
economic production sectors, which are sugar, gold and coffee. Brazil was
dependent on enslaved African labour until the 19th century. Since then, Brazil
experienced a period of strong economic and demographic growth that led to a
mass immigration from Europe. After the 1882 independence, Brazil formed
the Empire of Brazil, which was a unitary state governed under a constitutional
monarchy and a parliamentary system. The country became a presidential
republic in 1889. Coffee exporters in Brazil dominated the country politically
until the populist leader Getulio Vargas rose into power in 1930. In 1964 an
authoritarian military came to power and ruled until 1985, after which civilian
governance resumed. Brazil is currently a Federal Republic based on the 1988
constitution.
2UNDP: Human development Report 2015: http://hdr.undp.org
3 CIA World Factbook,2016
6
So far Brazil has had 36 presidents from 1891 to date, with the current
president, Dilma Rousseff, the first female president in Brazil.
4. Economic Overview4
Brazil’s economy is bigger than all other South American countries, because of
its large and well developed mining, agricultural, manufacturing and service
sectors. The country also has a lot of natural resources including water,
favourable climate and arable land, which boosts Brazil’s market to be one of
the largest in the world.
Since 2008, Brazil became a net external creditor and all three of the major
ratings agencies5 awarded investment grade status to its debt. Brazil
experienced strong growth in 2007 and first half of 2008. Brazil became one of
the first developing countries to recover from the 2008 World financial crisis.
During the recovery period Brazil reached a GDP growth rate of 7.5% and was
the highest experienced in the country for the past 25 years. Table 1 below
shows Brazil’s economic indicators during 2015.
Table 1: Brazil’s Economic indicators
GDP US $3.166 Trillion
World rank(GDP) 8th
GDP(per capita) US $15.800
World rank(GDP per capita) 101
Public debt(GDP) 67.4%
Exchange rate (Reals per US Dollar) 3.419
Inflation 10.6%
Unemployment rate 6.4%
Population below poverty line 21.45%
Population below extreme poverty line 4%
Source: CIA World Factbook 2015
4 www.worldbank.org
5 Moody’s Investor’s Services, Standard & Poor’s and Fitch Ratings
7
Table 2. GDP contribution by sectors
Sector Contribution to
GDP(%)
Contribution
to labor
force%
Agriculture 5.9% 15.7%
Industrial 22.2% 13.3%
Services 71.9% 71%
Source: CIA World Factbook 2015
Table 2 above shows that, the services sector was the main contributor to the
GDP of Brazil in 2015 with 71.9% and contributing 71% to the labour force as
well.
5. Infrastructure6
Table 3: Brazil’s infrastructure
Transportation Communication
Airports
721
Telephones
44.1 million
Heliports
13
Mobiles
280.7 million
Railways
28.538 km
Broadcast media
More than 1000
radio stations. 138
TV stations with
more than 100
channels.
Roadways
1.580.964 km
Internet hosts
26.577 million
6 CIA World Factbook,2016
8
Waterways
50.000 km
Internet users
108.2 million (53%
of the total
population)
Merchant marines
109
Ports
18
Source: CIA World Factbook, 2016
Brazil’s overall infrastructure is ranked seventy four out of 140 countries7. The
overall infrastructure has improved slightly between 2014 and 2015. The worst
are the airports and the roadways. Brazil has traditionally underinvested in
infrastructure projects. After many failed previous attempts to improve the state
of infrastructure, Brazil’s government initiated a plan to improve its
infrastructure in 2015. The plan involved the private sector companies to build
and operate roads, railways, ports and airports at an estimated value of $64.1
billion. This value covers the improvement of the existing infrastructure as well.
All new projects, aimed at improving the country’s productivity will start no later
than 2018, with railways being a priority in this government plan (Wall Street
Journal, June 9, 2015).
Transport8
Airports
Brazil has 721 airports and 130 of these airports are for commercial use and
30 are situated in the state capitals. The air transport quality has improved9
significantly in 2015 ranking 77th from 95th in 2014.The São Paulo-Guarulhos,
Brasilia, Campinas-Viracopos, Belo Horizonte and Rio de Janeiro have been
privatised.
7 The World Economic Forum, 201? .
8 The World Economic Forum ranks Brazil’s transport infrastructure 77
th out of 140
9 World Economic Forum
9
Railway
Brazil has inefficient railways and ranked ninety five10 . There was no
improvement between 2014 and 2015 in the quality of the railroads in Brazil.
Brazil doesn’t invest directly to the subways and urban trains constructions
because of inefficient electricity available to operate the railway transport.
Brazil’s railway was built to transport commodities not people hence
overcrowding in the trains because of routes shared between the cargo and
the passenger trains.
Roadways
Brazil’s roadway quality ranked 121th out of 140 countries according to the
World Economic Forum in 2015. There was no improvement in quality
between 2014 and 2015. Brazil has one of the largest highway systems in the
World, which is inadequate because it is the primary means of transport for
passengers and freight. 5.5% of the roads are paved, whilst 94.5% are
unpaved.
Communication system
Brazil’s telephone main lines in use ranked 8th whereas mobile cellular ranked
6th in the world. The telephone system in Brazil is very good and includes an
extensive microwave relay system and a satellite system with 64 stations.
Fixed lines connections have been relatively stable in the recent years,
standing at about 20 per 100 persons. The major driver in expanding the
telephone service has been the less expensive mobile cellular technology
accessible to lower income part of the population, at 120 per 100 persons.
Brazil has more than 1000 radio stations and more than 100 TV channels
operating, mostly privately owned.
Internet hosts amount to 26,577 million, ranking 3rd in the world. The internet
users are 75,982 million, ranking 4th in the world.
10
World Economic Forum
10
6. Risk profile11
Sovereign risk12: Moderate
Brazil’s size of the economy is very large with a growing active population. It is
characterised by advanced manufacturing industries and large domestic
market. Although it is marked by strong foreign direct investment and high
level of foreign reserves, Brazil is faced with deteriorating macroeconomic
trends. The GDP growth decreased by 3.8%, inflation at 10.6%, current
account at -3.3% and a public debt at 66% of the GDP.
Currency risk: Moderate
Amongst the major economies, Brazil’s Real has been one of the fastest falling
currency against the dollar. The political and economic instability in Brazil has
weakened the Real in the beginning of 2016. The new introduced business
friendly administration has led to the Real recovering. There is good
prospective for the new administration in Brazil.
Political risk: Moderate safety
Brazil has an effective political system that allows for democratic transfers of
power. The country has been surrounded by social tensions and corruptions.
Demonstrations were held against Ms Rousseff over corruption and how she
handled the economy. Brazil’s national oil company Petróleo Brasileiro
(Petrobras13) scandal has affected Brazil’s politics. This scandal involves the
leaders and politicians from the ruling coalition. The political instability is of
great concern because it raises questions of whether the government will be
able to restore order to the public finances.
11
Country.eiu.com 12
The risk that a government could default on its debt (sovereign debt) or other obligations. Also, the risk generally associated with
investing in a particular country, or providing funds to its government. Also called country risk. 13
Formed in 1953 as Brazil’s national oil company, Petróleo Brasileiro is one of Latin America’s largest companies. The government
holds a majority stake, but it is also listed in São Paulo and New York and counts thousands of ordinary Brazilians among its shareholders.
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Economic structure risk: Moderate Risk
Brazil economy is built by a diversified economy, strong corporate sectors,
financial sectors, a low external debt burden, and diversified export industries
and markets. Brazil’s manufacturing sector’s competitiveness has decreased
because of the increasing labor costs, inadequate infrastructure and a heavy
tax burden. The manufacturing sector contributed 12.4% to the GDP in 2014.
The savings rate was below 16% in 2014. Brazil’s public debt burden and poor
economic performance weigh on the outlook, but the country's sound financial
system is supportive.
7. Bilateral, Regional & Multilateral Trade Agreements
Brazil has been a WTO member since 1st January 1995. Brazil is one of the
WTO's most active participants, individually, and within the WTO lobby groups
like BRICS, G20, and Cairns Group.
Brazil is a member of the Common Market of The South (MERCOSUR) since
26 March 1991, which is a customs union and trading bloc with Brazil,
Argentine, Paraguay, Uruguay and Venezuela (who was suspended from
MERCOSUR on 1 December 2016). MERCOSUR is Brazil's main preferential
agreement in terms of value of trade, comprising some 10% of its merchandise
trade.
Brazil signed the following as a MERCUSOR member state:
Free trade agreement with Israel, which was signed in September 2007 and
entered in force in September 2011.
Free trade agreement with Peru which was signed in November 2005
Free trade agreement with Bolivia which was signed in December 1996 and
entered in force in February 1997
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Free trade agreement with Chile which was signed in June 1996 and entered
into force in October 1996
Free trade agreement with Egypt which was signed in August 2010,
Free trade agreement with Palestine which was signed in December 2011
Preferential trade agreement with SACU which was signed in December
2008 and implemented in 2016 retrospectively to 1 March 2016.
Preferential trade agreement with Suriname which was signed in April 2005
and entered into force in July 2006
Preferential trade agreement with Colombia, Ecuador, Venezuela was signed
in October 2004
Preferential trade agreement with India which was signed in January 2004
and entered in force in June 2009
Preferential trade agreement with Mexico which was signed in September
2002 and entered into force in May 2003
Preferential trade agreement with Guyana was signed in June 2001 and
entered into force in May 2004
Preferential trade agreement with Brazil was signed in December 1990 and
entered into force in at the same time
Preferential trade agreement with Uruguay signed in September 1986 and
entered into force in October 1986
Framework agreement with Morocco signed in November 2004 and entered
into force in April 2010
Framework agreement with Mexico was signed in July 2002 and entered into
force in January 2006
8. Brazil’s Agriculture, Forestry and Fisheries Trade Structure &
Product Analysis
This section looks at Brazil’s major agricultural exports and imports together
with the main markets and suppliers. During 2011-2015, Brazil’s top
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agricultural export products were soybeans and Cane sugar. Table 13 below
shows that soybean was ranked 1st as Brazil agricultural export product.
Further, corn (maize) was ranked 5th as Brazil’s agricultural export product.
Brazil’s top 10 agricultural export products had a combined average value of R
584.5 billion during 2011-2015.
Table 13 Brazil top ten agricultural exports (2011-2015) in Billion Rands
2011 2012 2013 2014 2015 Average
Ave
Share
(%)
HS CODE
Agriculture Products
592.606 684.623 834.482 890.300 947.336 883.51
120190 Soybeans 0 139.804 219.683 248.027 261.911 173.89 19.68
170114 Cane Sugar 0 81.825 88.788 80.975 75.965 65.51 7.41
230400 Soybean Oilcake 41.171 54.443 66.077 75.540 74.012 62.25 7.05
090111 Coffee 58.607 46.953 44.007 65.644 70.757 57.19 6.47
100590 Corn (Maize) 19.666 44.732 60.349 42.632 66.516 47.50 5.38
020230 Meat Of Bovine
Animals 25.431 30.105 43.409 53.071 50.872. 46.78 5.29
020714 Chicken Cuts
And Edible Offal 32.418 35.045 40.478 48.391 50.458 41.36 4.68
020712 Meat & Offal Of
Chickens 18.970 20.241 26.991 26.341 29.169 40.58 4.59
240120 Tobacco 19.917 24.965 29.764 25.003 25.858 25.10 2.84
170199 Cane/Beet Sugar 24.582 23.283 25.677 21.808 22.231. 24.34 2.76
Source: Global Trade Atlas,2016
Table 14 below shows Brazil’s average top ten agricultural import products
between 2011 and 2015.The top ranked agricultural import products were
wheat & meslin and malt. Brazil’s top 10 agricultural import products had a
combined average value of R 19.4 billion during 2011-2015
14
Table 14. Brazil top ten agricultural imports (2011-2015) in Billion Rands
2011 2012 2013 2014 2015 Average
Average
Share
(%)
HS CODE
Agricultural products
106.492 115.172 142.743 156.672 143.904 133.00
100199
Wheat And Meslin,
0 14.154 23.295 19.559 15.482 14.50 10.90
110710
Malt, Not Roasted 3.692 4.397 5.086 6.3494 5.283 4.96 3.73
200410
Potatoes, Prepared
0 1.890 3.581 4.658 4.776 2.98 2.24
100190
Wheat (Other Than Durum
Wheat 2.309 2.431 2.856 3.255 3.743 2.92 2.19
210690
Food Preparations 1.576 1.695 3.292 3.850 3.740 2.83 2.13
220421
Wine, Fr Grape 13.234 0.288 0 0 0 2.70 2.03
150910
Olive Oil/Fractions,
Virgin 1.571 2.122 2.833 3.258 3.239 2.61 1.96
230990
Animal Feed Prep 1.923 2.1565 2.475 3.138 3.308 2.60 1.96
151329
Palm Kernel Or Babassu Oil
1.649 2.025 2.869 3.170 2.829 2.51 1.89
070320
Garlic, Fresh Or Chilled
1.403 1.791 2.276 2.781 3.226 2.30 1.73
Source: Global Trade Atlas
Brazil’s major trading partners for agriculture, forestry and fisheries (AFF)
products
Chart 1: Brazil’s agriculture main import suppliers (2011-2015)
15
Argentina30%
United States13%
Uruguay8%
Paraguay7%
China5%
Other37%
Brazil's main agriculture import suppliers
Source: Global Trade Atlas, 2016
Chart 1 above depicts the average shares of Brazil’s main suppliers of
agriculture products between 2011 and 2015. Brazil absorbed on average
63% of their total agriculture imports from 5 countries, Argentina (30%),
United States (13%), Uruguay (8%), Paraguay (7%) and China (5%).
Chart 2: Brazil’s agriculture major export destinations (2011-2015)
China22%
Netherlands6%
United States5%
Russia4%Japan
4%
Other59%
Brazil's major agriculture export destinations
Source: Global Trade Atlas, 2016
Chart 2 above depicts the average shares of Brazil’s main export markets of
agriculture products between 2011 and 2015. China (22%), Netherlands (6%),
United States (5%), Russia (4%) and Japan (4%) were the top 5 Brazil’s export
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markets between 2011 and 2015. These markets absorbed a total average
share of 41% of Brazil’s exports of agricultural products between 2011 and
2015.
Chart 3: Brazil’s main forestry import suppliers (2011-2015)
United States18%
China14%
Germany10%Argentina
9%Canada
8%
Other41%
Brazil's main forestry import suppliers
Source: Global Trade Atlas, 2016
Chart 3 above illustrates that on average between 2011 and 2015, Brazil’s
forestry imports from the world was dominated by 5 countries supplying 59% of
all Brazil’s forestry imports. The main suppliers of Brazil’s forestry imports are
United States (18%), China (14%), Germany (10%), Argentina (9%) and
Canada (8%).
Chart 4: Brazil forestry major export destinations (2011-2015)
17
United States21%
China19%
Netherlands11%
Italy7%
Argentina5%
Other37%
Brazil's major forestry export destinations
Source: Global Trade Atlas, 2016
Chart 4 above shows Brazil’s major export destinations of its forestry products.
On average between 2011 and 2015, the United States absorbed the largest
share of Brazil’s forestry exports to the world at 21%. China (19%),
Netherlands (11%), Italy (7%), and Argentina (5%) absorbed on average 42%
of forestry products from Brazil in the same period.
Chart 5: Brazil fisheries main import suppliers (2011-2015)
Chile34%
China17%
Norway12%
Argentina9%
Portugal7%
Other21%
Brazil's main fisheries import suppliers
Source: Global Trade Atlas, 2016
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Chart 5 above shows Brazil’s main suppliers of fisheries products between
2011 and 2015. On average, more than half (i.e. 79%) of Brazil’s fisheries
supply is dominated by Chile (34%), China (17%), Norway (12%), Argentina
(9%) and Portugal (7%).
Chart 6: Brazil fisheries major export destinations (2011-2015)
United States37%
Hong Kong7%Spain
7%Belgium
6%
Japan5%
Other38%
Brazil's main fisheries export destinations
Source: Global Trade Atlas, 2016
Chart 6 above shows Brazil’s major fisheries export markets between 2011
and 2015. On average, the United States (37%) is the biggest importer of
Brazil’s fisheries products followed by Hong Kong (7%), Belgium (6%) and
Japan (5%).
9. South Africa – Brazil trading relationship in agriculture, forestry
and fisheries products
Major imports and exports
Table 11 below shows SA’s average top ten AFF import products from Brazil
between 2010 and 2015 in terms of value and share. The main AFF import
products were chicken cuts (R1.246 billion) and cane/beet sugar (R0.845
19
billion) with a combined average share of 46% of the total SA imports of AFF
products from Brazil between 2010 and 2015.
Table 11: South Africa’s top 10 AFF imports from Brazil (2010-2015) in Billions of
Rands
2010 2011 2012 2013 2014 2015 Ave
Ave%
Share
HS Code
AFF 3.051 4.619 4.951 5.385 3.520 5.738 4.544
020714 Chicken Cuts 1.103 1.397 1.239 1.243 1.037 1.456 1.246 27
170199 Cane/Beet Sugar 0.356 0.705 1.081 1.584 0.526 0.818 0.845 19
100590 Corn (Maize) 0.036 0.094 0.001 0.005 - 0.738. 0.146 3
240120 Tobacco 0.322 0.234 0. 246 0.171 0.366 0.411 0.292 6
120190 Soybeans - - - - 0.082 0.401 0.080 2
020727 Turkey Cuts 0.164 0.130 0.238. 0.279 0.232 0.214 0.209 5
480255 Paper 0.003 0.006 0.003 0.012 0.007 0.120 0.025 1
170114 Cane Sugar - - 0.143 0.315 0.046 0.118 0.104 2
441239 Plywood 0.037 0.066 0.082 0.079 0.175 0.106 0.091 2
090111 Coffee 0.029 0.047 0.038 0.034 0.060 0.071 0.047 1
Source: Global Trade Atlas
Table 12 below shows SA’s average top ten AFF export products to Brazil
between 2010 and 2015 in terms of value and share. The main AFF exports
products were liqueurs and cordial (R 42.587 million) , dried grapes (R29.294
million) , vegetable seed (R26.717) and grape wines (R26.163) with a
combined average share of 64% of the total SA exports of AFF products to
Brazil between 2010-2015.
Table 12: South Africa’s top 10 AFF exports to Brazil (2010-2015) in Millions
of Rands
2010 2011 2012 2013 2014 2015 Ave
Ave %share
HS Code
AFF 139.7
97 181.1
78 166.6
39 172.9
85 278.7
03 237.5
13 196.1
36
220870 Liqueurs And
Cordials 20.79
3 29.44
9 48.09
1 37.24
8 47.14
2 72.79
8 42.58
7 22
20
080620 Grapes, dried 14.63
4 4.207
29.697
26.191
58.332
42.699
29.294
15
120991 Vegetable
Seeds 9.557
15.233
21.681
30.876
41.890
41.067
26.717
14
220421 Wine, Grape 26.00
6 15.98
3 24.84
7 19.12
5 32.73
1 38.28
5 26.16
3 13
481910 Cartons, Boxes
18.737
25.874
7.503 14.58
4 21.08
1 28.27
7 19.34
3 10
210390 Sauces 0.478 0.768 1.898 2.260 4.167 8.916 3.081 2
080262 Macadamia
Nuts - - - -
10.898
7.000 2.983 2
090411 Pepper Of
Genus Piper 0.031 0.288 - 0.124 2.302 3.773 1.086 1
030381 Dogfish /Sharks
- - 2.687 1.376 2.752 3.522 1.723 1
210610 Protein
Concentrates 0 0 0 0 1.546 3.280
804.446
1
Source: Global Trade Atlas
10. Trade & Tariff Policies14
Measures directly affecting imports into Brazil
Table 15: Brazil’s import procedure system
PRIOR TO SHIPMENT DURING SHIPMENT UPON PRODUCT ARRIVAL
1. Plant Registration 7.Shipping Instructions 9. Notification of Cargo Arrival
2. Ingredients Evaluation 8. Bill of Lading (B/L) or Airway Bill (AWB) 10. Import Declaration (DI)
3. Labelling 11. Inspection MAPA/ANVISA
4. Product Registration 12. Customs’ Evaluation
5. Pro Forma Invoice 13. Re-Inspection/Product Release
6. Import License (LI)
Source: www.globaltrade.net
Brazil sets strict control for imports of animal origin products, vegetable origin
products, alcoholic and non-alcoholic beverages and organic products. Brazil
allows imports of food that has ingredients that meet the specification,
14
Brazil TPR (201?)
21
tolerance levels and the labelling of food and beverages set by the government
of Brazil. Products exported to Brazil are classified under two categories; they
may be exempted from registration or must be registered. Products of animal
origin, margarine and honey must be registered before importing. A pro forma
invoice is imported for clearance. The clearance process can only start when a
pro forma invoice is sent to the Brazilian importer. Import permit is compulsory
and requested before shipment of products such as food and beverages. All
this procedures are conducted before any shipment.
A shipping instruction that has all the information concerning the shipment
together with the documents for the importer must be provided. A bill of lading
or airway bill will issued. These procedures are to be followed during the
shipment process.
The SISCOMEX15 system sends the cargo to the customs terminal for storage.
Import Declaration is prepared by the importer and all taxes paid. The import
permit (LI) is presented to MAPA16 by the importer. A number of processes by
the customs official are done for the release of the goods to the importer. The
release of the goods is dependent on whether the product classification and
tax payments requirements are met. Finally the MAPA inspector re-inspects
before admitting the goods into Brazil.
Brazil’s import procedures are high considering the procedures, time and cost
it may take to import to Brazil. A lot of documents are required for the import
process to take place. A lot of documents is requested and made by the
relevant agencies. On average 18 different documents are requested. These
procedures are longer if dealing with products such as food of animal origin,
plant origin and beverages because they must be registered prior importing.
15
Integrated Foreign Trade System 16
Brazillian Ministry of Agriculture, Livestock and Food supply
22
Such products are at risk of arriving at their destination in a different condition
it was when the goods arrived at the port of entry. This affects imports to
Brazil.
11. Agricultural Markets Accessibility17
Brazil applies 10.2% average tariff on agricultural products and 14.1% for non-
agricultural products, which was higher than the average MFN applied tariff for
agricultural products and non-agricultural products in 2014. Brazil applies
10.2%, 17, 0% average MFN tariff on Fruits & vegetables & plants and
Beverages & tobacco respectively.
12. Trade potential analysis
Table 16 below shows the 5 top products with the highest potential and scoring
a TPI score of 5. The agricultural products that have potential are Seeds;
vegetables for sowing; Sauces; preparations and mixed condiments, and
mixed seasonings; vegetable extracts; Plants &parts of plants (incl seed &
fruit) used in pharmaceuticals, perfumes and insecticides; and Food
preparations. There are no forestry and fishery products with potential.
Table 16: South Africa's AFF products with potential for export to Brazil according
to the TPI
HS Code Products Existenc
e of trade
Growth in
Brazil's imports from SA
2010-2015
Brazil's growth
in imports
from world 2010-2015
SA's exports growth
to World
Indicative
potential Trade > 1 million
Total TPI
120991 Seeds, vegetable, for
sowing 1 1 1 1 1 5
210390 Sauces and
preparations and mixed 1 1 1 1 1 5
17
World Tariffs profiles 2015
23
condiments and mixed seasonings
130219 Vegetable saps and
extracts 1 1 1 1 1 5
121190
Plants &parts of plants(incl seed&fruit)
used in pharmaceuticals,perfu
mes,insecticides
1 1 1 1 1 5
210690 Food preparations 1 1 1 1 1 5
Source: World Trade Map
13. Conclusion
Brazil is one of the world main producers of agricultural products and rich in
natural resources. Brazil’s exports of agricultural products are high. Brazil is a
source of food such as Broiler meat for direct consumption in SA. The study
indicates that Brazil is self sufficient in producing agricultural products.
Based on the TPI there are opportunities for SA to can export to Brazil. The
products with potential according to the TPI are Seeds; vegetables for sowing;
Sauces; preparations and mixed condiments, and mixed seasonings;
vegetable extracts; Plants &parts of plants (incl seed & fruit) used in
pharmaceuticals, perfumes and insecticides; and Food preparations.
The study reveals that Brazil’s market is protected by high tariffs and non-tariff
barriers to be considered to gain access to the Brazil market. The non tariff
barriers such as valuation of products at customs, registration procedures and
rules of origin. The study also shows that the products that SA has potential to
export to Brazil have registration requirements before exporting.
24
Annexure 1 - Trade Potential Index methodology
The Trade Potential Index uses a scoring system based on data obtained from the
Trade Map database. This allows the analysis to focus on trade potential whilst
taking cognizance of import demand, import trends, growth rates and unit values
rather than focusing solely on trade potential values. A score of either 1 or 0 is
assigned to the selected trade indicators contained in the database. This score is
then aggregated to give a total score, which is measured against a final score of 5.
A score of 1 would therefore represent the lowest end of the scale and the least
trade potential whilst a score of 5 would indicate the greatest trade potential.
The basic criterion for scoring is as follows:
• Existence of current trade: If current trade in the form of imports from or exports to
the partner country does exist, a score of 1 is allocated. The absence of trade is
allocated a score of 0. The existence of a trade relationship is deemed a significant
factor in furthering trade.
• Growth in import demand from a partner country: If imports from the partner
country have registered positive growth measured over the latest five year period, a
score of 1 is allocated. No growth or negative growth rates are awarded a score of
0.
• Growth in import demand from the world: Import growth from the world is used as
an indication of general import demand with positive growth allocated a score of 1
and no or negative growth a score of 0. The inclusion of this value in the table is
also intended to indicate general import demand for the product as well as providing
a basis for comparing demand for specific country products relative to demand for
the same product from global sources.
• Export growth to the World: Exports growth from the exporting country to the rest
of the world is indicative of exporting country’s supply capacity and increased
25
demand for its locally produced goods. A positive growth rate in the value of net
exports over a five year period is awarded a score of 1, whilst no or negative growth
is awarded a score of 0.
More indicators such as the one below and others may be included in the TPI
analysis above.
Market access – Tariff level: If exports from the exporting partner country enter
the importing partner at a zero rate of duty, a score of 1 is allocated; otherwise a
score of 0 is awarded.
Annexure II
Table 17 South Africa's AFF products with potential for export to Brazil according to the TPI
HS Code Products
Exist
ence
of
trade
Grow
th in
Brazil
's
impo
rts
from
SA
2010-
2015
Brazil's
growth
in
import
s from
world
2010-
2015
SA's
expor
ts
growt
h to
Worl
d
Indic
ative
poten
tial
Trade
> 1
millio
n
T
o
t
a
l
T
P
I
120991 Seeds, vegetable, nes for sowing 1 1 1 1 1 5
210390
Sauces and preparations nes and mixed
condiments and mixed seasonings 1 1 1 1 1 5
130219 Vegetable saps and extracts nes 1 1 1 1 1 5
121190
Plants &pts of plants(incl sed&fruit) usd in
pharm,perf,insect etc nes 1 1 1 1 1 5
210690 Food preparations nes 1 1 1 1 1 5
220870 Liqueurs and cordials 1 1 1 0 1 4
080620 Grapes, dried 1 1 0 1 1 4
090411
Pepper of the genus Piper,ex cubeb
pepper,neither crushd nor ground 1 1 1 1 0 4
26
220410 Grape wines, sparkling 1 1 1 0 1 4
091099 Spices nes 1 0 1 1 1 4
090412
Pepper of the genus Piper, except cubeb
pepper, crushed or ground 1 0 1 1 1 4
210410
Soups and broths and preparations
thereof 1 1 1 0 1 4
220290
Non-alcoholic beverages nes,excludg
fruit/veg juices of headg No 20.09 1 1 0 1 1 4
151590
Veg fats&oils nes&their fractions,refind or
not but not chemically mod 1 0 1 1 1 4
180690
Chocolate and other food preparations
containing cocoa nes 1 1 1 0 1 4
090220
Green tea (not fermented) in packages
exceeding 3 kg 1 0 1 1 1 4
150910 Olive oil, virgin 1 0 1 1 1 4
200870
Peaches nes,o/w prep o presvd whether
o not sugard,sweetend o spiritd 1 0 1 1 1 4
220890
Undenatrd ethyl alc <80% alc cont by
vol&spirit,liqueur&spirit bev nes 1 0 1 1 1 4
491110
Trade advertising material, commercial
catalogue and the like 1 0 1 1 1 4
220421
Grape wines nes,incl fort&grape
must,unfermntd by add alc in ctnr<=2l 1 0 1 0 1 3
481910
Cartons, boxes and cases, of corrugated
paper or paperboard 1 0 1 0 1 3
051000
Ambergris,castoreum,etc,bile
drid/not&animal gland&prod for pharm
prep 1 0 1 1 0 3
210610
Protein concentrates and textured protein
substances 1 0 1 0 1 3
051199
Animal prods nes&dead animals of
Chapter I unfit for human consumption 1 0 0 1 1 3
200990
Mixtures of juices unfermentd¬ spiritd
whether o not sugard o sweet 1 0 0 1 1 3
220510
Vermouth&oth grape wines flav w plants
o arom subst in ctnr <= 2 l 1 0 1 1 0 3
060290 Plants live, nes 1 0 1 0 1 3
470200 Chemical wood pulp, dissolving grades 1 0 0 1 1 3
071290
Vegetables and mixtures dried, but not
further prepared nes 1 0 1 0 1 3
200961 Grape juice, incl. grape must, 1 0 1 1 0 3
27
unfermented, Brix value <= 30 at 20°C,
210120
Tea or maté extracts,essences &
concentrates & preparations thereof 1 0 1 0 1 3
120750 Mustard seeds, whether or not broken 1 0 1 1 0 3
200971
Apple juice, unfermented, Brix value <=
20 at 20°C, whether or not con 1 0 1 1 0 3
442010 Statuettes and other ornaments of wood 1 0 1 0 1 3
091030 Turmeric (curcuma) 1 0 1 1 0 3
121299
Vegetable products nes used primarily for
human consumption 1 0 1 1 0 3
200919
Orange juice&nes,unfermentd not
spiritd,whether or not sugard or sweet 1 0 1 1 0 3
482390 Paper and paper articles, nes 1 0 1 0 1 3
490199
Books, brochures, leaflets and similar
printed matter, nes 1 0 1 0 1 3
010619
Live mammals (excl. primates, whales,
dolphins and purpoises "mammals 1 0 1 1 0 3
020120 Bovine cuts bone in, fresh or chilled 0 0 1 1 1 3
020130 Bovine cuts boneless, fresh or chilled 0 0 1 1 1 3
020230 Bovine cuts boneless, frozen 0 0 1 1 1 3
020442 Sheep cuts, bone in, frozen 0 0 1 1 1 3
040221
Milk and cream powder unsweetened
exceeding 1.5% fat 0 0 1 1 1 3
040490
Products consisting of natural milk
constituents sweetened or not nes 0 0 1 1 1 3
070951 Mushrooms, fresh or chilled 0 0 1 1 1 3
080510 Oranges, fresh or dried 0 0 1 1 1 3
080520
Mandarins(tang&sats)clementines&wilkg
s &sim citrus hybrids,fresh/drid 0 0 1 1 1 3
080550
Fresh or dried lemons "Citrus limon,
Citrus limonum" and limes "Citrus 0 0 1 1 1 3
080610 Grapes, fresh 0 0 1 1 1 3
080810 Apples, fresh 0 0 1 1 1 3
080940 Plums and sloes, fresh 0 0 1 1 1 3
081040
Cranberries, bilberries and other fruits of
the genus Vaccinium, fresh 0 0 1 1 1 3
081090 Fruits, fresh nes 0 0 1 1 1 3
081190
Fruits&edible nuts uncook,steam/boil
(water) sweetend/not,frozen,nes 0 0 1 1 1 3
081340 Fruits, dried nes 0 0 1 1 1 3
28
090230
Black tea (fermented) & partly fermentd
tea in packages not exceedg 3 kg 1 0 1 1 0 3
110419 Cereals, rolled or flaked grains nes 0 0 1 1 1 3
110520 Potato flakes 0 0 1 1 1 3
120999 Seeds, fruit and spores for sowing, nes 0 0 1 1 1 3
130190
Natural gums, resins, gum-resins and
balsam, except arabic gum 1 0 1 0 1 3
150420
Fish fats&oils&their fractions exc
liver,refind/not,not chemically mod 0 0 1 1 1 3
150710
Soya-bean oil crude, whether or not
degummed 0 0 1 1 1 3
151190
Palm oil and its fractions refined but not
chemically modified 0 0 1 1 1 3
151620
Veg fats &oils&fractions
hydrogenatd,inter/re-esterifid,etc,ref'd/not 0 0 1 1 1 3
170211
Lactose and lactose syrup, >99% lactose
on dry matter 1 0 1 0 1 3
170290 Sugar nes, including invert sugar 1 0 1 0 1 3
170490
Sugar confectionery nes (includg white
chocolate),not containg cocoa 1 0 1 0 1 3
180620
Chocolate&other food preparations
containg cocoa weighg more than 2 kg 0 0 1 1 1 3
180632
Choc&food prep cntg cocoa in
blocks,slabs/bars,not filld,not over 2 kg 0 0 1 1 1 3
190110
Prep of cereals,flour,starch/milk f infant
use,put up f retail sale 0 0 1 1 1 3
190120
Mixes & doughs for the prep of bakers'
wares of heading No 19.05, nes 0 0 1 1 1 3
190190
Malt extract&food prep of Ch 19 <50%
cocoa&hd 0401 to 0404 < 10% cocoa 0 0 1 1 1 3
190219
Uncooked pasta, not stuffed or otherwise
prepared, nes 0 0 1 1 1 3
190230 Pasta nes 0 0 1 1 1 3
190490
Cereals,exc maize (corn),in grain
form,pre-cookd or otherwise prepard 0 0 1 1 1 3
200410
Potatoes prepard or preservd oth than by
vinegar or acetic acid,frozen 0 0 1 1 1 3
200599
Vegetables and mixtures of vegetables,
prepared or preserved otherwise 0 0 1 1 1 3
200799
Jams,fruit jellies,fruit/nut
purée&paste,ckd 1 0 0 1 1 3
29
prep,sugard,sweetend/not
200912
Orange juice, unfermented, Brix value <=
20 at 20°C, whether or not co 1 0 0 1 1 3
210210 Yeasts, active 1 0 1 0 1 3
210330
Mustard flour and meal and prepared
mustard 0 0 1 1 1 3
220300 Beer made from malt 0 0 1 1 1 3
220429
Grape wines nes,incl fort&grape
must,unfermntd by add alc,in ctnr > 2l 1 0 1 1 0 3
220830 Whiskies 0 0 1 1 1 3
220860 Vodka 0 0 1 1 1 3
230990 Animal feed preparations nes 0 0 1 1 1 3
440890
Veneer, non-coniferous nes, less than 6
mm thick 1 0 1 0 1 3
441890
Builder's joinery and carpentery of wood
nes 0 0 1 1 1 3
441900 Tableware and kitchenware, of wood 0 0 1 1 1 3
442190 Wood articles nes 0 0 1 1 1 3
480810 Paper, corrugated, in rolls or sheets 0 0 1 1 1 3
481029
Paper, fine, woodcontaining, in rolls or
sheets, clay coated, nes 0 0 1 1 1 3
481159
Paper and paperboard, surface-coloured,
surface-decorated or printed, 0 0 1 1 1 3
481890
Household or hospital supplies, of paper,
nes 0 0 1 1 1 3
482020 Exercise books of paper 0 0 1 1 1 3