Bilateral Trade

Singapore is the prime trading partner of Brazil in Southeast Asia and the 27th largest destination of exports from Brazil. In 2007, the Brazil-Singapore trade turnover reached US$ 2.6 billion, which represented a growth of 20% in relation to 2006, led by the exports, which climbed by about 46%. Since 2002, the average annual increase of the bilateral trade between Brazil and Singapore hit 18.2%. In 2007, Brazil exported to Singapore US$ 1.38 billion and imported US$ 1.21 billion, registering a surplus of US$ 170.33 million. In 2006, there was a deficit of US$ 247 million. The recovery of the exports does not yet enable to define a trend, since surpluses and deficits have alternated in recent years. What is certain is that the total bilateral trade is in full expansion, having the exports and imports in 2007 attained their highest historical figure and the trade surplus recorded its highest figure since 1992.

Evolution of the Brasil-Singapore Trade Flow (in US$ million)

In 2007, exports from Brazil to Singapore reached 0.86% of the total Brazilian exports (in 2006, this percentage was of 0.69%). The imports remained virtually stable and their participation in the overall Brazilian imports was reduced to 1.0% (in 2006, it was of 1.3%).

Exports, Imports and Trade Flow with Brazil (2007)

Source: SECEX/MDIC (Aliceweb)

Singapore is the 4th largest trade partner and destination of Brazilian exports to Ásia, trailing China, Japan and Korea. The exports from Brazil to Singapore exceed those to Hong Kong, Uruguay and India, for example, while the figure for the bilateral trade flow is of an order similar to those with Colombia and South Africa.

Exports from Brazil to Selected Countries - 2007 (US$ million)

With regard to exports from Brazil by aggregate categories, their increase in 2007 was of about 50% for the semi-manufactured products, while the exports of primary products rose by 32.4% in 2007.

There was once again a growing concentration of the export range throughout 2007. The ten leading products added up came to constitute 81.03% of the exports, percentage that recorded 77.7%, in 2006, and 60.1% in 2005. Nevertheless, there was a decentralisation if one considers only the ten principal products. Fuel oil, which came to account for 47.8% of the exports in 2006, was responsible for just 28.6% in 2007. There was a major rise in the participation of “other machines and mechanical appliances having individual functions”, which did not appear in the list in 2006.

As in previous years, the meats continued to contribute with the greatest number of products exported among the ten leading ones, with four categories. There were substantial gains in percentage participation, especially in regard to “meat-cuts and edible offal of poultry, frozen”. This was due, mostly, to a growing effort of Singapore to diversify its markets towards new continents, with the aim of curbing the restrictions of the regional supply. There were also significant efforts on the Brazilian side to expand its market, which comes to amount in some months to over 80% of the chicken consumed in the island.

10 Leading Products Exported by Brazil to Singapore in 2007

Source: SECEX/MDIC (Aliceweb) 

In regard to the exporting companies from Brazil, there are yet no available data for 2007, but, in 2006, Petrobras was the only company the exports of which to Singapore exceeded US$ 100 million. Motorola exported over US$ 50 million, and Perdigão, Seara, Braskem, Doux Frangosul, Votorantim Metais Níquel, Independência Alimentos and Sadia exported between US$ 10 million and US$ 50 million (data from SECEX/MDIC).

In the matter of imports, the electric and electronic products from chapters 84 and 85 of the HS System account for about 90% of the total, as shown in the table below, a pattern that has already been repeating itself for some years. There may have been, however, the entry of various new products in the ranking of the top ten, if considering eight digits of HS code. The comparison with the data from 2006, however, raises questions on various categories, which may have appeared earlier under similar headings. The “RAM Memories” continue to augment their participation in the imports, achieving 8.3% in 2007. The concentration of the product range did not present variation, with the tem top products imported amounting to about 62% of the total imported by Brazil.

As concerns the leading importing companies, Motorola and Petrobras figure both with imports above US$ 50 million, according to data from SECEX/MDIC. They are followed by Flextronics, Hewlett-Packard Brasil, GE, Cisa Trading, Dell Computers, BenQ Eletroeletrônica, Sony, Nokia, IBM, among others, all of them with imports of between US$ 1 million and US$ 10 million. As was to be expected, in the segments of greater value-added instances, there is considerable trade within each industry and within each company, which appears to be corroborated by the data from companies exporting and importing.

10 Leading Products Imported by Brazil from Singapore in 2007

Source: SECEX/MDIC (Aliceweb

Flow of Investments

It is known that Singapore is the second largest investor from Asia in Brazil, after Japan. In recent years, these investments have expanded, notably with the acquisition of the national shipyards by Singaporean companies. Keppel Offshore & Marine acquired the former Verolme shipyard, with facilities in Niterói and Angra dos Reis, employing more than 5 thousand workers. Sembcorp had acquired, through its subsidiary Jurong Shipyard, the Mauá shipyard, but recently it dissolved the partnership and is now in search of a new partner so as to remain in Brazil. In addition, there are significant investments in the area of paper and pulp: Sateri International, subsidiary of the company RGM, acquired control over Bahia Pulp, which is its chef supplier of pulp and viscous substance and Petra Foods bought a cocoa plant from Nestlé in Itabuna. In the sector of electric and eletrônicos items, one can highlight the presence in Brazil of Creative Technology and of Flextronics, the latter a leader worldwide in the manufacture of equipment for telecommunications for the major brands, with revenues worldwide of US$ 14.5 billion in 32 countries. There are, moreover, companies in the field of shipment and storage of commodities, such as APL, Olam and Noble. Finally, Raffles Design Institute has also established a branch in São Paulo. In total, there are more than 17 companies. Recently, Temasek, holding for governmental assets with a portfolio superior to US$ 100 billion, announced that it will open a branch in Brazil in June 2008.

From the reverse side, there is a growing number of Brazilian companies that have their regional office based in Singapore, covering the operations in Southeast Ásia or in the overall Asia-Pacific region. Such is the case of Petrobras and of Embraer, which recently upgraded their representative offices to the category of subsidiaries. Petrobras sealed, in Singapore, contracts amounting in excess of US$ 2 billion in 2006, while Embraer inaugurated in April a training centre with flight simulator and parts-replacement centre for the sales of aircraft in the region, elevating its number of staff to more than forty. Vale as well established an office in the Island in 2007, to strengthen its presence in the Asia-Pacific region after taking over Canada’s INCO. Other companies installed here are WEG, Votorantim Químicos, Perdigão, Queiroz Galvão and AGRENCO, in addition to de providers of services for Petrobras, such as Forship Asia. In 2007, Clube dos Treze signed a Memorandum of Understanding with ST Teleport to enable the sale of image broadcasts of football matches from Brazil for the market in Singapore. At the moment, the negotiations are progressing, having as aim not only the sale of content related to football, but also to tourism and culture, due to an agreement sealed by Clube dos Treze with the Ministry of Tourism.