AN INSIGHT INTO THE EVOLUTION OF THE INTERNATIONAL MARKET
The Brazilian balance of trade has been registering a positive balance for consecutive months. In May this year, according to information from the Ministry of Development, Industry and Trade (MDIC), exportation reached US$ 17.571 billion and importation reached US$ 11.134 billion, which resulted in a record trade surplus of US$ 6.4 billion. The previous record for the same month was registered in 2008, when the trade surplus reached R$4.6 billion.
Based on the evolution of these figures, month to month, it’s easy to believe that we’re in a very favorable moment for exportation, which along with the current situation in the national market, for reasons of political conjuncture and national economics, presents itself as a consistent alternative for Brazilian companies to grow their business.
This is in a global context, but is it the same for the confectionary sector itself? In the eyes of the companies from this sector, which are investing in the development of their foreign market, yes, the outlook is very positive. They began to notice greater movement since the previous month, which indicates an evolution in the volume of consistent business for the remaining months of this year.
“It’s a good moment, despite the fact that it could be better if the exchange rate was more favorable. In some markets there has been a certain drop, as found in countries such as Angola, Nigeria, Venezuela and Gabon, which were interesting markets but countries in which the currency has devalued substantially. On the other hand, countries in Latin America and the Middle East are becoming ever more important in negotiations and, as such, we’re putting our focus on them at this time. This way, we begin balancing the results, maintaining the volume of business”, evaluates Adriano Colombo Gabaldi, Exportation Manager for Jazam, a company that exports bonbons, pastilles, toppings and milk fudge.
Gabaldi comments further that for the upcoming months the expectation of the company is very positive in terms of international business. It’s a gradual evolution, a result of the work that Jazam has done over the last few years, by way of participating in international fairs and periodic visits to clients and potential clients abroad. “This has helped our brand to become better known in the market and as a result, the tendency is to continue growing in exportations. It is important to understand that to collect the fruits that we collect today, we had to, during several years, invest in the search for opportunities to enter new markets.”
The beginning of the year didn’t guarantee very good results in exportations for Docile, a consequence of the reduction in purchases by some clients in the first few months, but as of May, as pointed out by Cristian Ahlert, Exportation Coordinator for the company, the quarter has begun to revert and now points to far more favorable conditions in the upcoming months. “Specifically for us, the beginning of the year didn’t go as well as it has done in previous years. It has now begun to improve however and for June we expect to see considerable growth, even with the dollar at the level it currently is, as we have calculated to operate with the dollar at R$4.00 and it currently stands at around R$3.50. We have some very well established negotiations to further indicate this growth estimate".
According to Ahlert, aside from the growth in volume for Docile, which within the pastilles segment is the largest producer in Latin America with 2.2 million kilos per month, they have also increased the number of products in the international market. On the other hand, he states that the production of these products has become more expensive due to some of the main raw materials being based on the dollar, negotiated in international stocks: cardboard boxes have increased in price, the resins, and the plastic packaging have also undergone price adjustments. “In summary: the current panorama is of a large increase in costs and the fall in the dollar has reduced our margin. However, we will have to sell more, in larger quantities, to the foreign market and, quite probably, increase the price of sale."
In the case of Nugali Chocolates, there has been a new situation in relation to exportation at the start of this year. According to Maitê Lang, Director of Operations, traditionally the second semester of the year is when they see the largest movement in exportation, when the orders from clients in the United States begin to come in, however, this year has also seen a large volume of business from the foreign market in the first semester, as a result of sales into new international markets.
“This year we have verified that in the first few months, the volume of exportation represented 80% more than that of the previous year in the same period, a growth that was caused by commencing sales in South American countries”, affirms Maitê, adding that the expectation is to close 2016 with a growth in exportation volume between 6-7%. “We had a more ambitious goal, considering this recent result compared with that of the previous year, it is a good sign, but now it is wiser to be more cautious to ensure we maintain our initial growth expectation.”