What makes Brazil an excellent exporter?

Over the past years Brazil has been showing itself as an excellent exporter. On April, 2016 Forbes magazine 2015 Global 2000 rankings  published that exports from Brazil amounted to US$191.1 billion in 2015 and represented 6.2% of the total Brazilian economic output.

Most of the Brazilian exports are delivered to Asian and European importers. The country also sells a great amount of goods to Latin America (excluding Mexico), to Caribbean nations and to African and North American continents.

Brazil’s Top 10 Exports:

1. Oil seed
2. Ores, slag, ash
3. Oil
4. Meat
5. Machines, engines, pumps
6. Vehicles
7. Iron and steel
8. Sugar
9. Food waste, animal fodder
10. Coffee, tea and spices

The most recent Intercâmbio Comercial do Agronegócio (Ministério da Agricultura) reinforced that Brazil is already seen worldwide as an excellent exporter and pointed out that, currently, the country’s strongest competitive advantages are on the international trade field known as Agribusiness.

Agribusiness in Brazil:

The Agribusiness plays an expressive role in Brazil’s economy. The country occupies remarkable positions on the global agroindustry rank:

Number 1 – global producer of coffee, sugar and orange

Number 1- sugarcane producer and leader on the sugar and ethanol global exports

Number 1- poultry and meat exporter

Number 2 – soybeans producer          

Brazil is a country with natural vocation for agribusiness due to its characteristics and diversities. With its 8.5 million kilometers, Brazil has potential for expanding its agricultural capacity without harming the environment.

 

Favorable attributes:

  • Availability of agricultural land
  • Water abundance
  • Cutting-edge technology
  • High level of natural brightness
  • Favorable weather
  • Land relief characteristics

Challenges to be beaten:

  • Logistic and infrastructure issues
  • Complexity of The Brazilian Tax Legislation
  • Lack of financial resources
  • Business management deficiencies
  • Unprepared labor

 

Brazilian Exclusivities:

Fruits

Brazil is one of the top fruit producers in the world. It is estimated that there are, at least, 300 kinds of fruits in Brazil. Besides its exotic exclusively native fruits, such as Guaraná and Açaí, which grow only in the Amazon region and are exported to the rest of the planet, there is a wide variety of fruits, for example oranges and kiwi, that are not native to Brazil but have been introduced to the country as they grow in greater abundance in Brazilian soil.

Cachaça

Cachaça is a distilled beverage made from the fresh-pressed juice of sugarcane. Also known as aguardentebranquinhacaninha and some other ‘nicknames’, it is Brazil’s national (alcoholic) spirit.

According to the Instituto Brasileiro da Cachaça (IBRAC), cachaça is officially recognized as a distinctive product of Brazil and one of the export products promoted by the Brazilian government’s economic growth initiative. The ‘Brazilian Spirit’ is the leader of Brazil’s exports in this product category, but, unfortunately, at present, only 1% of all the cachaça produced in Brazil is exported.

The country intends to raise this volume to 10% until 2018 though.

Havaianas

Havaianas is a brand of flip-flop sandals owned by the Brazilian manufacturing company Alpargatas. It became a global brand and achieved the position of the most popular flip-flops in the world, producing 150 million pairs every year.

Nowadays considered a fashion item (adopted even by international celebrities), Havaianas flip-flips are very present in overseas markets.  The brand exports 10% of its Havaianas production (about 162 million pairs/ year) to more than 80 countries from the five continents of the world.

Natural Cosmetics

Brazil is not only a significant exporter of agricultural products but also an important supplier of raw materials for cosmetics. International brands that produce certified nature-based cosmetics have been experiencing a growing demand lately.

Some Italian, Russian and French brands have famous formulations that are manufactured using Brazilian raw materials. The abundance of natural raw material in Brazil has even led some of these companies to move their basis to the country.

The Brazilian market for controlled ‘natural cosmetics’ and ‘nature-based cosmetics’ represents a share of 18% of the worldwide turnover (about US$ 29.5bn).

It is clear that Brazil has a formidable growth potential to become an excellent exporter in lots of areas that the country does not focus on. Given the size of the country, its economic and business potential, Brazil has most of what is necessary to make a difference in this ‘new world’.

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Import from Brazil without unpleasent surprises

In 2014 Brazil became the 23rd largest exporter in the world. During the past five years the import of goods from Brazil has increased at an annual rate of 7.6%. There is a wide variety of things that we export to many countries all over the world. According to the Observatory of Economic Complexity, the top products imported from Brazil are Iron Ore and Soybeans, followed by Crude Petroleum, Raw Sugar and Poultry Meat. To import products from Brazil represents a growing business opportunity.

How difficult is it to import from Brazil?

There are some requirements and specific procedures to be attentive to when you import goods from Brazil. It is a relatively simple process, but to avoid any types of trouble, you would rather familiarize yourself with Brazilian trade laws and regulations that cover exports.

First Considerations:

 Why importing from Brazil;

 What kinds of goods you want to import;

 How to import the chosen items;

 Advantages and disadvantages of importing them from Brazil.

What You Will Need:

Product suppliers

To be sure you are importing from a good supplier, maintain a local business presence.

An import-export attorney in Brazil

This professional will make formal arrangements with the suppliers from whom you intend to buy. He will put in writing everything that could affect you in case of inability to deliver the goods at your port of entry (e.g. pricing, purchasing quotas, shipping details and anything else you consider important).

Licensed Customs broker

To import from Brazil, hire a Brazilian licensed customs broker with specific experience in your product area and task him with classifying every individual good you plan to import according to an international method of product classification. This will be the major determining factors in the duties or taxes you will pay on what you import.

Logistics specialist

Management, logistics and planning play crucial part in international trade. It may become the biggest pain when things don`t move as they were meant to.

Shipping service

Be careful with cheaper freights. They usually charge less by offering a longer transit time. If you make this choice, be prepared to take the risk of possible issues of backlogs at transshipment ports, delays, congestions at final ports and really expensive extra fees. Besides that, if you are importing perishable items, they may arrive useless due to delay, loss of refrigeration and/ or poor handling. Always go for good shipping lines instead.

Pay great attention to:

Documents and Certificates/Typo Mistake and Error in paperwork

The same particular good may require certain kind of certificates and documents for entering in country ‘X’, and totally different papers if you export it to country ‘Y’. This surely will cause shipment to get stuck at the port of destination. Keep in mind that the exporter is the responsible for issuing and/or obtaining all the necessary documents. Make sure he provides everything properly and have your Customs broker in Brazil revise them.

Quality Rejects

Sometimes goods leave port in perfect condition, but arrive damaged at the port of discharge. It often occurs due to faulty containers (water seepage, dust, rust etc.) This causes the entire load rejection. It is important to get the container survey done before goods are stuffed and sealed.

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5 Characteristics of the modern importer

Foreign trade have seen a number of changes throughout the years, and competition has never been more fierce, due to, among different reasons, the possibilities in communication and global market research. Find out below 5 of the most important characteristics of and importer who wishes to succeed in the business.

1 – Knows the product and believes in it

The modern importer knows the pros and cons of the product he is buying from a foreign country. It is possible that he familiarized himself with the product in the exporting country, and he has a special belief that this item will be successful also overseas. It may be that he first saw this product in the place it is originally made and was attracted to it, and he eventually found a country that produces it more efficiently and at lower costs. He has studied the product and continually increases his knowledge on it. He has passion for it and believe that this will succeed in a foreign market.

2 – Knows how to handle the barriers that the exporting country may impose

Some countries in development, such as Brazil and India, which have continually grown to export, may present bureaucratic barriers that will slow down the importing process. Tariffs, taxes and regulations and inefficiency in procedures can lead to frustration, and it is crucial that the importer will be patient and know how to deal with such impositions, knowing the best way to
handle some possible difficulties that the exporting country will apply.

3 – Has a B-plan and does not get disappointed easily

The modern importer knows that failing is not the end, but an open door to a potential new opportunity. He is good at dealing with frustration and always has a B-plan if his initial idea did not work out the way he wanted. This B-plan can be a different product, a different market or even a different exporting country. He does not get disappointed easily and knows that by doing the
best he can and believing that he will achieve success, he will eventually get it at the right time.

4 – Knows his competitors

Knowing his competitors, their weaknesses and strengths is fundamental when it comes to be a successful importer. Investigating and studying their history will help a new potential importer to achieve what he wants in a shorter time.
5.  Develops competitive pricing

When importing a product,  developing a competitive pricing is essential, and should include profit margin and commission, among other elements, such as the ones listed below:

– Uniqueness:  Is this a new product in your market?

– Quality – Is this a top quality product or a low-cost “for the masses” one?

– Costs involved in production: How much did it cost to make this product?

– Competition: who are your competitors, and what are your strengths before them that will help you get ahead in the business.

– Product positioning, which is the process marketers use to determine how to best communicate their products’ attributes to their target customers based on customer needs, competitive pressures, available communication channels and carefully crafted key messages.

 

6 Risk factors that should be taken into consideration before importing

Every importer should be aware of the risks that bringing a new product into a new market may face. It doesn’t really matter if it is a demand from the public or this is a new product being presented to the market: it is always good to keep in mind the attributes below.

1 – Cultural characteristics of a country

Not every country present traders with an easy approach to business. Due to a number of reasons (economical, political), some countries may impose to traders a large number of taxes, regulations, paperwork, inefficiency procedures and traditional way of conducting business. Some countries and companies are still ruled by old-fashioned traditions and this may be something that the importer should look into before deciding to go ahead with the business.

2 – Knowing the best way to communicate with the country you are importing from

It is extremely important that a trader finds the best way of communicating within the country he wishes to import from. Learning the language can be not only helpful in terms of understanding who you are doing business with, but it will also show your potential business partner that you are truly keen. You can also look for support in domestic agencies that will help you conducting processes in a country you don’t know much about.

3 – Economic and political scenario

Even though some countries offer quite stable economics for foreign trade, some of the countries that export the most are the ones who could present the biggest economical problems and politics matters. For this reason, it is crucial that economic factors are taken into consideration, and that the importer will keep in mind that these issues may pose as a risk factor, due to the instability of certain countries. Information is crucial: reading the news on what is going on in the country is key.

4 – Will the product be well accepted?

It doesn’t matter if the product is a demand from the public or it is the importer’s idea: it is fundamental that the importer conducts studies of well acceptance prior to initiating the business. Some entrepreneurs will invest in research before bringing a new product into the market, which will help measure the acceptance of a new product.

5 – Competition
Even if the importer is sure that the product that he aims to bring into the market is top quality and will be well accepted by the customers, another factor to consider is the internal competition. They should be aware and study the market, their competitors and mainly, the competitor’s product. Only this way he will be able to compare his product with others and decide to go ahead with the business or not.

6 – Familiarizing with rules and regulations

Studying all the processes and, if possible, having the assistance of a company that specializes in offering support to traders have proved to be a step forward taken by successful importers. Sometimes the cost of this professional support is not that high if compared to the losses an importer could face if they had not done such research in advance.