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  April 8th, 2016 | Written by

Plan Emerges to Develop Direct Ocean Routes From South America to Arab Countries

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  • Bilateral trade between South America and the Arab countries amounts to $34.7 billion per year.
  • Arab Brazilian Chamber of Commerce supports proposal to form South American-Arab logistics and maritime partnerships.
  • South American exports to Arab countries grew from $7.9 billion in 2005 $20.8 billion in 2014.

The Arab Brazilian Chamber of Commerce is supporting for the upcoming meeting April 13 to 14 in Cairo, Egypt among members of the Summit of South American-Arab Countries (ASPA).

Government officials and business executives from the 34 ASPA member countries will tackle the establishment of two joint ventures in logistics and ocean transportation proposed at the fourth ASPA Business Forum last year, held simultaneously with the fourth ASPA Summit in Riyadh, Saudi Arabia.

South American and Arab countries have been experiencing growing trade ties over the past few years. Nonetheless, a direct ocean transportation route between the two regions is nonexistent. Instead, the routes connecting them go through Europe via the Mediterranean Sea.

The Cairo meeting in April aims to bridge this gap through discussions of strategic logistics and maritime partnerships.

“Since much of international trade depends on sea transportation, the establishment of joint companies by South American and Arab countries is becoming increasingly relevant to fostering trade,” said Michel Alaby, secretary general and CEO of the Arab Brazilian Chamber of Commerce. “As soon as they are implemented, the logistics and sea transportation ventures will significantly bring the current trade relations between the two regions to new heights of growth and development. Import and export activities will accelerate and improve, while significantly reducing the corresponding costs.”

ABCC research indicates that that South American exports to Arab countries grew from $7.9 billion in 2005 $20.8 billion in 2014. Bilateral trade amounts to 80.1 million tons per year worth $34.7 billion, of which, according to another study, three-quarters by volume are South American exports to the Arab world. Trade consists mainly of commodities such as iron ore, corn, sugar, wheat, beef, soybeans, aluminum oxides, rice, fruit, and wood.

Arab states export 19.98 million tons of worth of goods to South American countries, primarily oil, fertilizers, natural gas, calcium phosphates, polymers, sulfur, cement, inorganic chemicals, and steel and glass items. Brazil and Argentina are the leading exporters and importers of goods to from the Arab countries in South America.