Dubai weighs infrastructure investments in northern Brazil to boost agricultural shipments

After establishing solid partnerships with ports in Southern and Southeastern Brazil, Dubai’s government venue for promoting global trade, the World Logistics Passport (WLP), is now eyeing investments in the so-called Northern Arc [Arco Norte] as its next route for expanding Brazilian exports to the Arab world.

Grain shipments are at the forefront of this strategy, along with fruits and other halal products from Brazil—such as meats.

During a mission from the Ministry of Agriculture to the Middle East, Senator Irajá presented a project to the Dubai government to implement a waterway to transport goods to the region’s ports.

In an interview with the press, WLP’s General Manager, Mahmood Al Bastaki, stated that the platform would certainly be interested in the project, as it would help reduce the shipping cost of grains to the United Arab Emirates.

According to Al Bastaki, it’s not possible to determine when a partnership will be closed because investors still need to be chosen.

The project involves the implementation of 1,200 kilometers of waterways along the Tocantins and Araguaia rivers. The senator estimates that the waterborne transportation cost of one ton of soy could be half the amount by truck to the port of Santos, which reaches $110.

“We approved it in the Senate Infrastructure Committee, and now it remains to be included in the 2024 Union budget,” he told the news outlet.

The Secretary-General of the Arab-Brazilian Chamber of Commerce, Tamer Mansour, stated that government plans, such as the Gulf countries’ “Vision 2030,” have encouraged local food production, including animal proteins.

“The Gulf countries, in general, have increased purchases of productive inputs, such as soy and corn products, used in the feed for poultry, goats, sheep, and cattle.”

The chart below displays corn exports from the Arco Norte ports mentioned above between Jan 2019 and Aug 2023. The data is from DataLiner.

Corn exports – Arco Norte | Jan 2019 – Aug 2023 | WTMT

Source: DataLiner (click here to request a demo)

This movement is considered positive, but Brazilian exporters want to continue growing their presence in value-added categories. “The Gulf countries have demand, for example, for fast-preparation foods. There is also demand for dairy products, fruits, vegetables, certified organic products, and many others,” Mansour emphasized.

Another move made by WLP in the country was a partnership with the port and maritime logistics operator Wilson Sons, which is responsible for the container terminal of the Port of Salvador (Tecon) in Bahia.

“The cooperation will grant greater agility, speed, and lower prices for producers to channel their goods via Bahia, reducing land and sea freight and the shipping time for cargo,” Al Bastaki said.

Additionally, WLP also signed an agreement last month with the Northeast Consortium and the certifier Fambras to incorporate the states in the region into the halal goods development route; the region is responsible for only 3% of exports to the UAE. The expectation is that the agreement will help qualify mainly sheep and goats.

Al Bastaki highlighted that Dubai’s role in Brazil, through the platform, aims at food security and, in addition to meeting the internal demand for grains, aims to make the country a distribution hub for essential products to the Middle East, Africa, and Asia.

WLP partners have priority in the customs process with faster lines at ports and airports, as well as reduced handling fees, akin to a loyalty program. The platform also connects importers and exporters.

“The main issue for WLP is to facilitate trade, eliminate barriers, and remove bureaucracy in any shipment made in a cross-border manner,” stated the executive.

According to him, even economies of two or three days in logistics processes can significantly impact business.

“To give you an idea of the platform’s impact on global trade, a WLP partner frozen chicken exporting company, for example, can save $1,020 on a 40-foot container,” Al Bastaki said.

Source: Globo Rural

Click here to read the original text material: https://globorural.globo.com/negocios/noticia/2023/11/arco-norte-deve-ser-rota-para-expandir-vendas-do-agro-aos-paises-arabes.ghtml

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