analysis of the brazilian economy as a potential …6.9 other manufacturing items-measuring or...

ANALYSIS OF THE BRAZILIAN ECONOMY AS A

POTENTIAL EXPORT DESTINATION FOR SRI LANKA

2008-2012

(Inclusive of January –March 2013 Export Data)

Prepared By: Export Development Board (EDB), Sri Lanka

July 2013

i Analysis of the Brazilian Economy as a Potential Destination for Sri Lanka

TABLE OF CONTENT

Page No.

Table of Content i

List of tables iv

List of figures vi

Executive summary vii

1. Significance of the study 2

1.1 Objectives of the study 2

2. Overview of the Brazilian economy 2

3. Performance of Sri Lanka’s exports in the Brazilian market 3

3.1 Exports to world Vs Exports to Brazil by Sri Lanka 3

3.2 Sri Lanka’s share in Brazil market 4

4. Overview of Brazilian Imports 5

4.1 Profile of Brazilian Consumers 5

4.2 Distribution channels available to Sri Lankan exporters 5

4.3 General tax treatment for imports 6

5. Products currently exported to Brazil with more opportunity to expand 7

6. Product wise analysis of selected export items 10

6.1 Industrial and Surgical Gloves of rubber 10

6.2 Woven Fabrics 11

6.3 Apparel - Articles of apparel, accessories, knit or crochet (HS 61) 12

6.4 Apparel - Articles of apparel, accessories, not knit or crochet (HS 62) 14

6.5 Rubber and rubber related products 15

6.5.1 Rubber products - Retreated or used tyres solid tyres etc. 16

6.5.2 Natural rubber 16

ii Analysis of the Brazilian Economy as a Potential Destination for Sri Lanka

6.5.3 Rubber Products -Vulcanized rubber etc. 17

6.6. Coconut based products 17

6.6.1 Desiccated Coconuts 17

6.6.2 Coconut oil 18

6.7 Electrical & Electronic products - Dish washing machines; machinery for aerating bottles 18

6.8 Apparel and clothing accessories of plastic 19

6.9 Other manufacturing items-Measuring or checking instruments etc… 19

6.10 Electrical & Electronic products-Transformers etc. 19

6.11 Activated carbon 20

6.12 Ceramic & Porcelain Products 21

6.13 Spices- Nutmeg 21

6.14 Tea- black tea 23

6.15 Fruits 23

7. Potential exportable products to Brazil market 23

8. Barriers to trade 26

8.1 Average tariff applied by Brazil for Industrial and Surgical Gloves of rubber 26

8.2Average tariff applied by Brazil for Woven Fabrics 26

8.3 Average tariff applied by Brazil for Apparel products 27

8.4 Average tariff applied by Brazil for Rubber tyres and tubes 28

8.5 Average tariff applied by Brazil for Solid or cushion tyres 28

8.6 Average tariff applied by Brazil for Natural Rubber 30

8.7 Average tariff applied by Brazil for Desiccated Coconut 31

iii Analysis of the Brazilian Economy as a Potential Destination for Sri Lanka

8.8 Average tariff applied by Brazil for Coconut Oil 31

8.9 Average tariff applied by Brazil for Electrical & Electronic products 32

8.10 Average tariff applied by Brazil for Apparel and clothing accessories of plastic 33

8.11 Average tariff applied by Brazil for Other Manufacturing items 34

8.12 Average tariff applied by Brazil for Activated carbon 34

8.13 Average tariff applied by Brazil for Ceramic & Porcelain products 35

8.14 Average tariff applied by Brazil for Spices (Nutmeg) 36

8.15 Average tariff applied by Brazil for Tea (Black Tea) 37

8.16 Average tariff applied by Brazil for Fruits 37

9. Import Tariff rates for Potential Products 38

9.1 Average tariff applied by Brazil for Fish, crustaceans, mollusks, aquatic invertebrates 38 9.2 Average tariff applied by Brazil for Footwear, gaiters and the like, parts there of 39

9.3 Average tariff applied by Brazil for Glass and glassware 40

9.4 Average tariff applied by Brazil for Insulated wire/cable 41

9.5 Average tariff applied by Brazil for Knitted or crocheted fabric 42

9.6 Average tariff applied by Brazil for Manmade filaments 43

10. Sri Lanka’s Exports to Brazil in the first quarter of 2013 43

11. Recommendation 46

iv Analysis of the Brazilian Economy as a Potential Destination for Sri Lanka

LIST OF TABLES

Page No.

Table 2.1 Overview of the Brazil economy 2

Table 3.2 Sri Lanka’s share in Brazil market 4

Table 5.0 Products currently exported to Brazil with more opportunity to expand 8

Table 6.1 Industrial and Surgical Gloves of rubber 11

Table 6.2 Woven Fabrics 11

Table 6.3 Apparel - Articles of apparel, accessories, knit or crochet (HS 61) 12

Table 6.4 Apparel - Articles of apparel, accessories, not knit or crochet (HS 62) 14

Table 6.5 Rubber tyres and tubes 15

Table 6.5.1 Rubber products - Retreaded or used tire solid tire etc… 16

Table 6.5.2 Natural rubber 16

Table 6.5.3 Rubber Products -Vulcanized rubber etc... 17

Table 6.6.1 Desiccated Coconuts 18

Table 6.6.2 Coconut Oil 18

Table 6.7 Electrical & Electronic products 19

Table 6.8 Apparel and clothing accessories of plastic 19

Table 6.9 Other manufacturing items-Measuring or checking instruments etc… 20

Table 6.10 Electrical & Electronic products-Transformers etc. 20

Table 6.11 Activated carbon 21

Table 6.12 Ceramic & Porcelain Products 21

Table 6.13 Spices- Nutmeg 22

Table 6.14 Tea- black tea 22

Table 6.15 Fruits 22

v Analysis of the Brazilian Economy as a Potential Destination for Sri Lanka

Table 7.0 Potential exportable products to Brazil marke 23

Table 8.1 Average tariff applied by Brazil for Industrial and Surgical Gloves of rubber 26

Table 8.2Average tariff applied by Brazil for Woven Fabrics 26

Table 8.3 Average tariff applied by Brazil for Apparel products 27

Table 8.4 Average tariff applied by Brazil for Rubber tyres and tubes 28

Table 8.5 Average tariff applied by Brazil for Solid or cushion tyres 29

Table 8.6 Average tariff applied by Brazil for Natural Rubber 30

Table 8.7 Average tariff applied by Brazil for Desiccated Coconut 31

Table 8.8 Average tariff applied by Brazil for Coconut Oil 32

Table 8.9 Average tariff applied by Brazil for Electrical & Electronic products 32

Table 8.10 Average tariff applied by Brazil for Apparel and clothing accessories of plastic 33

Table 8.11 Average tariff applied by Brazil for Other Manufacturing items 34

Table 8.12 Average tariff applied by Brazil for Activated carbon 35

Table 8.13 Average tariff applied by Brazil for Ceramic & Porcelain products 35

Table 8.14 Average tariff applied by Brazil for Spices (Nutmeg) 36

Table 8.15 Average tariff applied by Brazil for Tea (Black Tea) 37

Table 8.16 Average tariff applied by Brazil for Fruits 38

Table 9.1 Average tariff applied by Brazil for Fish, crustaceans, mollusks, aquatic inverteb… 39

Table 9.2 Average tariff applied by Brazil for Footwear, gaiters and the like, parts there of 40

Table 9.3 Average tariff applied by Brazil for Glass and glassware 41

Table 9.4 Average tariff applied by Brazil for Insulated wire/cable 41

Table 9.5 Average tariff applied by Brazil for Knitted or crocheted fabric 42

Table 9.6 Average tariff applied by Brazil for Manmade filaments 43

Table 10.1 Comparison of Sri Lanka’s Exports to Brazil in the first quarter of 2013 with the

exports in first quarter of 2012 44

vi Analysis of the Brazilian Economy as a Potential Destination for Sri Lanka

LIST OF FIGURES

Page No.

Fig 1:0 log diagram of Sri Lanka’s exports to USA, EU and Brazil over the period of

2008 to 2012 ix

Fig 3.0 Performance of Sri Lanka’s exports in the Brazilian market 3

Fig 3.1 Exports to world Vs Exports to Brazil by Sri Lanka 3

Fig 3.2 Sri Lanka's Share in the Brazil Market % 4

Fig 6.3.1 Trousers and shorts of synthetic fibers, knitted (HS 6103 &6104) 12

Fig 6.3.2 Shirts/blouses, knitted or crocheted (HS 6105 &6106) 13

Fig 6.3.3 Underpants/Panties, pyjamas, bathrobes etc, Knitted/crocheted (HS 6107 &6108) 13

Fig 6.3.4 T-shirts, singlets and other vests, knitted or crocheted (HS 6109) 13

Fig 6.4.1 Suits, jackets, trousers/Skirts etc & shorts (HS 6203& HS 6204) 14

Fig 6.4.2 Men's shirts & Women's blouses, shirts (HS 6205& HS 6206) 15

Fig 6.4.3 Brassieres and parts there of textile materials (HS621210) 15

Fig 7.0.1 Fish, crustaceans, mollusks, aquatic invertebrates 24

Fig 7.0.2 Insulated wire/cable 24

Fig 7.0.3 Footwear, gaiters and the like, parts thereof 24

Fig 7.0.4 Glass and glassware 25

Fig 7.0.5 Man made filaments 25

Fig 7.0.6 Knitted or crocheted fabric 25

vii Analysis of the Brazilian Economy as a Potential Destination for Sri Lanka

EXECUTIVE SUMMARY

This analysis was carried out to fulfill the main objective of identifying Brazil as a potential export

destination for Sri Lanka. Considering the inadequacy of research work done in this area, the Policy and

Strategic Planning Division felt it necessary to fill this gap by identifying products with considerable

potential to cater to the Brazilian market. It is believed that this effort would be useful to all the

divisions to plan their future proceedings.

The key findings of this research work are summarized below.

There is a potential to increase our exports to the Brazilian market.

During the period from 2010 to 2011, our exports to Brazil have increased by 26.1% and from

2011 to 2012 by 59.2%.

Compared to the total export value of Sri Lanka to Brazil in the 1st quarter of 2012, there is an

increase of US $ 1,913,000 in the 1st quarter of 2013. This is a growth of 21%. Following table

illustrates some of the products which shown a commendable increase in exports from Sri Lanka

to Brazil in the 1st quarter of 2013 in comparison to the 1st quarter of 2012.

Sri Lankan products are well accepted in the main markets in the world such as European Union,

USA, Middle East etc. We could use that advantage in promoting products to the Brazilian

market.

The main barrier for the Sri Lankan exporters is the high tariff rates imposed by Brazil. A

detailed analysis about the tariff rates are given in this analysis. Sri Lanka is also not offered any

tariff preferences on imported products. Our products are always charged the highest

prevailing tariff rate compared to tariffs applicable for other countries.

Sri Lanka is the number one exporter of Rubber products - Retreaded or used tyres and solid

tyres etc. to the Brazilian market. However it should be noted that Sri Lanka faces a higher tariff

rate of 16%, whereas some of our competitors for this product in the Brazil market enjoy much

favorable tariff rates.

Sri Lanka is a larger exporter of tea to the Brazil market. However our main competitors include

USA, Germany, UK, France, Spain, and Argentina where most of them don’t grow tea in their

respective countries. Sri Lanka should promote its well established brand name of Ceylon Tea in

the Brazilian market to capture a greater market share.

Sri Lanka’s export share of Woven Fabrics in the Brazil market was falling after 2008. One main

reason for that is the increase in export share of Indonesia and Turkey over the time period.

However during 2012 Sri Lanka managed to increase its share from 0.41% to 2.85%.

viii Analysis of the Brazilian Economy as a Potential Destination for Sri Lanka

For apparel products also, our main competing countries such as Argentina (0%), Peru (0%),

Mexico (28%), and Paraguay (0%) enjoy favorable tariff rates. Sri Lanka experiences a high tariff

rate of 35% for the product.

Another main issue for our exporters is the language barrier. Most of the documents in Brazil

are in Portuguese language.

Sri Lankan products have become less competitive in Brazil market due to non existence of trade

agreements with Brazil. India has already signed an agreement with Brazil since June 2009. This

confers reciprocal preferences on a limited set of products, aiming at the establishment of a free

trade area in future.

Brazilian consumers place more emphasis on price and quality than on the origin of the product when making a buying decision since the market is highly competitive. Therefore supplying detailed information on our export products is very important. Launching an efficient promotion campaign would be highly beneficial in this regard.

Sri Lanka’s export to Brazil was growing at a faster rate compared to the Sri Lanka’s growth in

exports to EU and USA. Furthermore our exports to Brazil show a continuous increase, except

for a minor decrease in 2009, over the selected time period. Therefore concentrating on the

Brazil market would provide opportunities to increase Sri Lankan exports to this market.

Fig 1: 0 log diagram of Sri Lanka’s exports to USA, EU and Brazil over the period of 2008 to 2012

We should work closely with relevant agencies such as the Sri Lanka High Commission in Brazil to solve

the prevailing issues related to exports and to start discussing the possibility of a bilateral trade

agreement with Brazil

2 Analysis of the Brazilian Economy as a Potential Destination for Sri Lanka

1. SIGNIFICANCE OF THE STUDY Brazil is one of the member countries in the BRICS group. These countries are identified as most

promising economies in the future. However much needs to be done to get a detailed understanding of

the Brazilian economy as a trading partner for Sri Lanka. This analysis is carried out towards that

objective.

1.1 Objectives of the study

The western countries continue to be the major destination for Sri Lanka’s exports, where EU and USA

together absorb nearly 50% of the country’s total exports. The economic crises prevailing in these

countries negatively impact the export earnings of Sri Lanka. Therefore, the EDB is concentrating on

and developing strategies to diversify our exports in to other markets, especially BRICS and other

emerging markets where the potential is high.

This study was carried out to fulfill the main objective of identifying Brazil as a potential export destination for Sri Lanka. An attempt has been made to identify potential products, the main barriers for the Sri Lankan exporters, a detailed analysis about the prevailing tariff rates, etc. in Brazil.

2. Overview of the Brazil Economy Table 2.1 Overview of the Brazil economy

Name Federative Republic of Brazil

Land Area 8.514.876 km2

Population (2012) 193,946,886

Language Portuguese

Currency Real (R$)

Exchange Rate (September 2012) US$ 1.00 = R$ 1.99

Per Capita GDP (2012) US$ 12,000

Trade (2012) Exports – $256 billion (2012 est.) Imports – $238.8 billion (2012 est.) Balance – US$ 17.2 billion Total Trade – US$ 494.8 billion

Reserves of foreign exchange and gold $371.1 billion (31 December 2012 est.)

Stock of direct foreign investment - at home $595.9 billion (31 December 2012 est.)

Inflation ( 2012) 5.5%

GDP - real growth rate 1.3% (2012 est.)


3. PERFORMANCE OF SRI LANKA’S EXPORTS IN THE BRAZILIAN

MARKET

The following diagram shows that during the period from 2010 to 2011, our exports to Brazil have

increased by 26.1% and by 59.2% from 2011 to 2012. (Source: ITC Data base)

3.1 Exports to world Vs Exports to Brazil by Sri Lanka

Following diagram compares the percentage changes of Sri Lanka’s exports to the world and exports to Brazil from Sri Lanka. It can be seen that our exports to Brazil has maintained at a good positive pace throughout the selected time period. The growth in Sri Lanka’s exports to Brazil has outpaced its growth

in exports to the world.

(Source: ITC Data base)

24

30

48

0

5

10

15

20

25

30

35

40

45

50

2010 2011 2012

US

$ m

illi

on

Fig 3.0 Performance of Sri Lanka’s exports in the Brazilian market

17% 21%

-4%

43% 37%

59%

-10%0%

10%20%30%40%50%60%70%

2009-2010

2010-2011

2011-2012

Growth of

Exports

Time Period

Fig 3.1 Exports to world Vs Exports to Brazil by Sri Lanka

To World To Brazil


3.2 Sri Lanka’s share in Brazil market

The following table illustrates Sri Lanka’s share in the Brazil market and for each year from 2007 to 2012.

Table 3.2 Sri Lanka’s share in Brazil market

2007 2008 2009 2010 2011 2012 Avg. annual rate of growth

Total size of the Brazil import market US$ millions

120,620

173,196

127,647

180,458

226,243

223,149

12%

Sri Lanka exports to Brazil US$ millions

17.1

22.8

18.1

23.7

29.9

47.5

17.6%

Sri Lanka’s share in Brazil market

0.014%

0.013%

0.014%

0.013%

0.013%

0.021%

-

Source: ITC Data base

It should be noticed that Sri Lanka caters for a small share in the Brazil market.

The following diagram graphically illustrates Sri Lanka's Share in the Brazil Market. It shows that the Sri

Lanka’s market share remained almost constant prior to year 2012. But some improvement is shown in

the year 2012.


0.00%

0.01%

0.01%

0.02%

0.02%

0.03%

2007 2008 2009 2010 2011 2012

Sh

are %

fig 3.2 Sri Lanka's Share in the Brazil Market %


4. OVERVIEW OF BRAZILIAN IMPORTS

Brazil imports commodities mainly for two reasons. That is for direct consumption and as inputs in the domestic production. However, more than half of the goods imported by Brazil are intermediate products used as inputs in domestic production. Further, the demand for imported goods varies according to different regions in Brazil. Among all the Brazilian regions, The South East and Southern regions are considered as the country’s wealthiest and most developed with the most diversified consumption patterns, making them highly attractive markets. So, generally exporters of high value added products will be at a greater advantage in catering to these regions. Further, a significant amount of agricultural products, electronic and communications equipment, and rubber and plastic products are imported by the Southern region.

Brazil’s Northern Region has the largest land area when compared to regions in the country. The Manaus Free Trade Zone which is located in this region is considered as the industrial heart of the North, where large numbers of consumer electronics are assembled from imported components. As a result intermediate goods related to manufacturing electronic and communications equipments are widely imported in to this region.

Sri Lankan exporters can get detailed information on importers in Brazil by logging in to www.brasilglobalnet.gov.br. 4.1 Profile of Brazilian Consumers Brazilian consumers place more emphasis on price and quality than on the origin of the product when making a buying decision since the market is highly competitive. Therefore supplying detailed information on exported products is very important. Launching an efficient promotion campaign would be highly beneficial in this regard.

4.2 Distribution channels available to Sri Lankan exporters

Sri Lankan exporters have four options in sending their products to Brazil market based on the demand for them.

1. Direct Exports

Direct Exporters can directly negotiate with importers in Brazil. Following table summarizes the possible advantages and disadvantages of this method.

Advantages Disadvantages

Easy to build trust and allow for immediate and direct decision making

Require more time and greater financial resources

Easier to clarify technical questions regarding a given product

Frequent/ continuous contact is needed with the importer

Opportunity to negotiate more favorable financial terms and conditions through the elimination of intermediaries


2. Indirect Exports Unlike direct exporting, this involves exporters to work through brokers. In Brazil, brokerage services are divided into two types of organizations: i.e. trading companies and commercial importers. Following table summarizes the possible advantages and disadvantages of this method.

Advantages Disadvantages

This method is more useful for small scale exporters.

Part of the profit is taken by the intermediary

Brokers have got detailed knowledge about the domestic market. So market research and transaction costs to the exporters are reduced

Weak direct contact with the importing company

Brokers handle the related business and customs procedures. Therefore less work load for the exporter.

3. Commercial Representatives

Exporting company could select an independent professional services provider or companies to act as their commercial representatives in Brazil. A commission has to be paid to their service based on the sales volumes. These professional service providers do not import directly, but focus on identifying Brazilian clients for imported products.

4. Opening an Office in Brazil Exporters with high demand for their product in the Brazilian market may choose to open a local office to establish contacts with their potential importers. This method is not recommended for a new exporter. 4.3 General tax treatment for imports The following tax structure is taken from a report of the Brazilian government. Any exporter willing to cater to the Brazil market will have to meet these taxes.

1. Import Tax (IT) - The tax applies only to products imported from abroad. This tax varies according to country of origin of the imported goods 2. Excise Tax - This tax also varies according to the characteristics of the product.

3. Social Integration Program Contribution (PIS) and Social Security Financing Contribution (COFINS). A fixed rate is applied to both contributions, which are 1.65% for the PIS and 7.6% for the COFINS.


4. Goods and Services Tax This tax also applies to imported goods, in order to ensure that domestically produced goods receive equal treatment.

5. Contribution for Intervention in the Economic Domain

This is a federal tax levied to regulate fuel prices. The CIDE-Fuel applies to the import and sale of gasoline, diesel, aviation kerosene, fuel oil, liquefied petroleum gas, and ethanol.

6. Additional Freight for the Renovation of the Merchant Marine (AFRMM)

This is a federal social tax for intervention in the economic domain assessed on the value of international freight or cabotage, aimed at providing resources to support the government’s efforts to develop the Brazilian merchant marine and shipbuilding and repair industry.

7. SISCOMEX Use Fee This levy is aimed at covering the Import Declaration registration costs of the Integrated Foreign Trade System – SISCOMEX. The fee varies according to the CNM classification number under which the Import Declaration is registered (The CNM classification codes are made up of eight numbers and are compatible with the Harmonized System).

8. Additional Costs

Other than the taxes mentioned above, imports are subject to other international commercial transaction fees such as Wharf age (costs of movement of goods at port), Warehousing, Import licensing costs, Customs clearance costs etc…

9. “Ex-Tariff”

This tariff has been created to reduce the Import Tax on capital goods and computer and telecommunications equipment for which a domestically produced equivalent does not exist or which are in short supply, and, additionally, the import of which the government has an interest in promoting.

5. PRODUCTS CURRENTLY EXPORTED TO BRAZIL WITH MORE

OPPORTUNITY TO EXPAND

Following table summarizes the position of some selected Sri Lankan products which are currently

exported to Brazil market. These products are selected since they have more opportunity for expansion

in the Brazilian market. The table shows the top ten competitors of Sri Lanka in the Brazilian market

for the respective product and the product wise position of Sri Lanka in the Brazilian market. The

products are listed according to earnings derived from export of these products to Brazil.


Table 5.0 Products currently exported to Brazil with high potential to expand

Product Total Imports to Brazil

(US$ ‘000)

Exports by Sri Lanka to Brazil

(US$ ‘000)

Sri Lanka’s rank among

the top exporters

Top Ten Competitors (According to world rank) of

Sri Lanka

Industrial & Surgical Gloves of rubber 228,695 15,505 4

Malaysia, Thailand, Uruguay, China, United States of America, Indonesia, Republic of Korea, Slovenia, India, Viet Nam

Woven Fabrics

268,365 10,410

10

Indonesia, Turkey, Thailand, India, Austria, Croatia, Germany, Viet Nam, Bangladesh, Malaysia

Apparel Articles of apparel, accessories, knit or crochet

932,811 4,736 18

China , Bangladesh , Peru, India,Indonesia, Viet Nam, Hong Kong-China , Argentina, Cambodia ,Italy

Apparel Articles of apparel, accessories, not knit or crochet

1,244,415 4,108

19

China, India, Bangladesh, Hong Kong, Viet Nam, Argentina, Italy, Indonesia, Paraguay, Portugal

Rubber Tyres and Tubes

1,531,371 3,731 30

China , Republic of Korea, Argentina, United States of America ,Japan, Thailand ,Spain, Colombia ,Chinese Taipei, Mexico

Rubber products

Retreated or used tire solid tire etc…

8,728 2,934 1

Argentina ,Korea, China ,Japan,

France, Vietnam, India, Italy

Romania, Taipei

Desiccated Coconuts

19,513 1,192 7

Indonesia, Philippines,

Thailand, Viet Nam, Singapore,

Peru, Belgium, Angola,

Argentina, Japan

Electrical & Electronic

Italy ,Germany, Sweden ,China, Spain, Switzerland, France,



(US$ ‘000)


(US$ ‘000)


the top exporters


Sri Lanka

products

Dish washing machines; machinery for aerating bottles

524,281 827 24 United States of America, Netherlands, Austria

Natural rubber 662,301 746 12

Indonesia,Thailand, Malaysia, Viet Nam,Côte d'Ivoire, Singapore,Guatemala, Cameroon, Liberia, Nigeria

Plastic Products

Apparel and clothing accessories (incl gloves) of plastic

42,909 618

5

China, Colombia, Hong Kong,

Korea, USA, Pakistan, Italy,

Thailand, Taipei, Japan

Other manufacturing items

Measuring or checking instruments etc…

369,573 408 36

United States of America, Germany, Japan, China, Italy, France, Republic of Korea, Canada, United Kingdom, Sweden

Rubber Products

Vulcanized rubber etc...

245,986 353 36

United States of America, Japan, China, Germany, Italy, Thailand ,France, Republic of Korea, Mexico, Spain

Electrical & Electronic products

Transformers etc.

80,672 289 44

Italy, Germany, Sweden, Spain,

France, Switzerland, Argentina,

Netherland, Japan, USA

Activated carbon 20,464 230 7 USA, China, France, Mexico,

Netherlands, Indonesia,



(US$ ‘000)


(US$ ‘000)


the top exporters


Sri Lanka

Malaysia, UK, India, Philippines

Ceramic & Porcelain Products

Tableware and kitchenware

70,107 173 9

China, Portugal, Hong Kong -China ,United Arab Emirates, Thailand , France, Germany, Italy, Japan, Spain

Spices

Nutmeg 3130 152 7

India, Indonesia, UAE,

Guatemala, Spain, Italy, Nepal,

Netherland, Angola, Paraguay

Tea

Black tea 570 133 5

UK, France, China, Germany USA, Argentina, Hong Kong, Canada, Poland, Lebanon

Fruits 2,031 122 7

Mexico, Israel,Chile,China, Argentina,United State of America, Indonesia,Uruguay, Portugal, Poland

Coconut oil 98 109 4

India, Philippines, China, Australia, Germany, United Kingdom, Paraguay

*Only 8 countries including Sri Lanka

Source: ITC Data Base

6. PRODUCT WISE ANALYSIS OF SELECTED EXPORTED ITEMS A more detailed analysis of products mentioned under section 5 is given below. The products have been listed according to the export values earned by Sri Lanka. 6.1 Industrial and Surgical Gloves of rubber

As illustrated in the following table, Industrial and Surgical Gloves of rubber to Brazil earns significant

export revenue to Sri Lanka. Nearly 7% of the imports of this product by Brazil are exported by Sri Lanka.


Even though Sri Lanka is the 4th largest exporter of this product to Brazil, it experiences a high tariff

barrier of 30.52%.

Table 6.1 Industrial and Surgical Gloves of rubber

2008 2009 2010 2011 2012 Avg. growth

rate 2008-2012

(%)

Total imports to

Brazil (US$ ‘000) 130,055 134,930 202,046 218,415 228,695 16.1%

Exports by Sri

Lanka to Brazil

(US$ ‘000) 6,218 5,657 10,281 12,795 15,505 26.4%

Sri Lanka’s share 4.78% 4.19% 5.09% 5.86% 6.78%


6.2 Woven Fabrics

Sri Lanka’s export share of Woven Fabrics in the Brazil market was falling after 2008. One main reason

for that is the increase in export share of Indonesia and Turkey over the time period under review.

However during 2012 Sri Lanka managed to increase its share from 0.41% to 2.85%.Sri Lanka

experiences an 18% tariff rate for the product. The average growth rate for the product is -0.05%. This

is because of the fall in the exports in 2010 and 2011. However from 2011 to 2012 exports were

increased by nearly ten times which shows a high potential for the product.

Table 6.2 Woven Fabrics

2008 2009 2010 2011 2012 Avg. growth

rate 2008-2012

(%)

Total imports to

Brazil (US$ ‘000) 169,794 288,296 248,643 268,365 365,047 14.5

Exports by Sri

Lanka to Brazil

(US$ ‘000) 6,451 4,914 1,282 1,105 10,410 -0.05%

Sri Lanka’s share 3.80% 1.70% 0.52% 0.41% 2.85%



6.3 Apparel - Articles of apparel, accessories, knit or crochet (HS 61)

Export share of these products remained almost the same during the time period selected, even though

the export values were increasing. Some of our main competing countries such as Argentina (0%), Peru

(0%), Mexico (28%), and Paraguay (0%) enjoy favorable tariff rates. Sri Lanka faces a high tariff rate of

35% for the product.

Table 6.3 Apparel - Articles of apparel, accessories, knit or crochet (HS 61)

2008 2009 2010 2011 2012 Avg. growth

rate 2008-2012

(%)

Total imports to

Brazil (US$ ‘000) 246,027 303,631 456,620 721,614 932,811 35.3

Exports by Sri

Lanka to Brazil

(US$ ‘000) 1,207 1,447 2,587 4,287 4,736 38.2

Sri Lanka’s share 0.5% 0.48% 0.57% 0.59% 0.51%


Following diagrams graphically illustrate how Sri Lanka’s export values of products under this category

(HS 61) changed from 2008 to 2012. (Source: ITC Data base)

Fig 6.3.1 Trousers and shorts of synthetic fibers, knitted (HS 6103 &6104)

0

50

100

150

200

250

300

350

2008 2009 2010 2011 2012

US

$ t

ho

usa

nd

Boys

Girls


Fig 6.3.2 Shirts/blouses, knitted or crocheted (HS 6105 &6106)

Fig 6.3.3 Underpants/Panties, pyjamas, bathrobes etc, Knitted/crocheted (HS 6107 &6108)

Fig 6.3.4 T-shirts, singlets and other vests, knitted or crocheted (HS 6109)

0

100

200

300

400

500

2008 2009 2010 2011 2012

US

$ t

ho

usa

nd

Boys

Girls

Line of best fit-boys

Line of best fit-girls

0

100

200

300

400

500

600

700

800

2008 2009 2010 2011 2012

US

$ t

ho

usa

nd

Boys

Girls

0

500

1000

1500

2000

2500

2008 2009 2010 2011 2012

US

$ t

ho

usa

nd

Total


6.4 Apparel - Articles of apparel, accessories, not knit or crochet (HS 62)

Export share of this product category shows a drop in 2009 and an increase in 2010. In year 2012 Sri

Lankan export value has reached more than US $ 4 million. For this product also our main competing

countries enjoy favorable tariff rates such as Argentina (0%), Peru (0%), Mexico (28%), and Paraguay

(0%). Sri Lanka experiences a high tariff rate of 35% for the products.

Table 6.4 Apparel - Articles of apparel, accessories, not knit or crochet (HS 62)

2008 2009 2010 2011 2012 Avg. growth

rate 2008-2012

(%)

Total imports to

Brazil (US$ ‘000) 447,733 463,441 616,386 999,538 1,244,415 28.1

Exports by Sri

Lanka to Brazil

(US$ ‘000) 954 404 1,261 1,571 4,108 42.7

Sri Lanka’s share 0.21% 0.09% 0.2% 0.16% 0.33%


Following diagrams show how the export values of products under this category (HS62) changed from

2008 to 2012 Source: (ITC Data base)

Fig 6.4.1 Suits, jackets, trousers/Skirts etc & shorts (HS 6203& HS 6204)

0

200

400

600

800

1000

1200

1400

1600

2008 2009 2010 2011 2012

US

$ t

ho

usa

nd

Boys

Girls


Fig 6.4.2. Men's shirts & Women's blouses, shirts (HS 6205& HS 6206)

Fig 6.4.3 Brassieres and parts there of textile materials (HS621210)

6.5 Rubber and rubber related products

The main export product of Sri Lanka under this product category is the Retreated or used tire, solid tire.

Sri Lanka is the number one exporter for that product to the Brazilian market. However Sri Lanka

experiences a high tariff barrier compared to its main competing countries, such as Argentina and

Columbia who enjoy 0% tariff rate.

Table 6.5 Rubber tyres and tubes

2008 2009 2010 2011 2012 Avg. growth rate

2008-2012 (%)

Total imports to

Brazil (US$ ‘000) 968,736 679,391 1,286,716 1,649,672 1,531,371 18

Exports by Sri

Lanka to Brazil 2,307 1,914 3,706 2,872 3,731 13.6

0

50

100

150

200

2008 2009 2010 2011 2012

US

$ t

ho

usa

nd

Mens

Women

0

500

1000

1500

2000

2008 2009 2010 2011 2012

US

$ t

ho

usa

nd

Total


(US$ ‘000)

Sri Lanka’s share 0.29%

0.28%

0.29%

0.17%

0.24%


6.5.1 Rubber products - Retreated or used tire solid tire etc…

Sri Lanka is the number one exporter of this product to the Brazilian market. However it should be

noted that Sri Lanka faces the highest tariff rate, whereas most of our competitors including the top ten

competitors enjoy much favorable tariff rates.

Table 6.5.1 Retreated or used tire solid tire

2008 2009 2010 2011 2012 Avg. growth

rate 2008-2012

(%)

Total imports to

Brazil (US$ ‘000) 14,895 8,025 8,587 9,737 8,728

3.7

Exports by Sri

Lanka to Brazil

(US$ ‘000) 2,546 919 1,854 3,146 2,934

40.1

Sri Lanka’s share 17.1% 11.45% 21.6% 32.3% 33.62%


6.5.2 Natural rubber

Exports of natural rubber from Sri Lanka face a low tariff rate of 4% in the Brazil market. From 2011 to

2012 total imports to Brazil has decreased by 40%. But total Sri Lankan exports to Brazil have not

significantly decreased, and our share has also increased.

Table 6.5.2 Natural rubber

2008 2009 2010 2011 2012 Avg. growth

rate 2008-2012

(%)

Total imports to

Brazil (US$ ‘000) 666,386 283,017 790,467 1,101,722 662,301 13.4

Exports by Sri

Lanka to Brazil 407 267 68 747 746 22.4


(US$ ‘000)


0.09%

0.01%

0.07%

0.11%


6.5.3 Rubber Products -Vulcanized rubber etc...

Sri Lanka has shown a remarkable increase in its share in the Brazil market by registering an 86.2% of

average annual rate of growth during the period under review.

Table 6.5.3 Rubber Products -Vulcanized rubber etc...

2008 2009 2010 2011 2012 Avg. growth

rate 2008-2012

(%)

Total imports

to Brazil (US$

‘000) 207,494 162,022 213,582 245,986 272,872 9.6

Exports by Sri

Lanka to Brazil

(US$ ‘000) 9 67 145 243 353 86.2

Sri Lanka’s

share

0.004% 0.04% 0.068% 0.99% 0.13%


6.6. Coconut based products

6.6.1 Desiccated Coconuts

From 2008 to 2009 there has been an increase in the Sri Lankan share, but this has decreased by a

greater margin during 2010 and 2011. This is mainly due to the increase in the export share of Thailand

and Indonesia in the Brazilian market. In 2012 Sri Lanka managed to retain its share in the Brazil market.

Sri Lanka faces a 10% tariff rate for the product but some of our competing countries enjoy a reduced

tariff rate such as Peru (0%) and Argentina (0%). The average growth rate for the product is -0.04%. This

is because of the fall in the exports in 2010 and 2011. However from 2011 to 2012 exports were

increased by nearly twenty five times which show a high potential for the product.


Table 6.6.1 Desiccated Coconuts

2008 2009 2010 2011 2012 Comp. growth

rate 2008-2012

(%)

Total imports to Brazil (US$ ‘000)

5,433 6,567 7,288 19,513 18,101 34.9

Exports by Sri Lanka

to Brazil (US$ ‘000) 399 625 107 47 1,192 -0.04


9.52%

1.47%

0.24%

6.59%


6.6.2 Coconut oil

Sri Lanka entered the Brazil market in 2012 by capturing nearly 6% of the Brazilian market share.

However the main constraint to increase the market share in Brazil is that a higher proportion of

domestic production of coconut oil is consumed in Sri Lanka. There few countries exporting Coconut oil

to Brazil. Paraguay faces a 0% tariff rate. Other than that all countries face a 10% tariff rate.

Table 6.6.2 Coconut Oil

2008 2009 2010 2011 2012


102 0 66 98 1,872

Exports by Sri Lanka to Brazil (US$

‘000) 0 0 0 0 109

Sri Lanka’s share -

-

-

-

5.82%


6.7 Electrical & Electronic products - Dish washing machines; machinery for aerating bottles

Sri Lanka has started exporting this product to Brazil market in 2011 and managed to increase its total

revenue from US $ 0.01million to US $ 0.8 million in 2012, a 99% increase in export revenue. Sri Lanka

experiences a 9.33% tariff rate which is similar rates faced by its main competitors. However Argentina

faces 0% tariff rate for its exports of this product.


Table 6.7 Electrical & Electronic products

2008 2009 2010 2011 2012

Total imports

to Brazil (US$

‘000) 350,748 361,202 458,379 614,284 524,281

Exports by Sri

Lanka to Brazil

(US$ ‘000) 0 0 0 10 827

Sri Lanka’s

share

-

-

-

-

0.16%


6.8 Apparel and clothing accessories of plastic

Sri Lankan share in this product category decreased in 2009 and managed to recover in 2010. Currently

Sri Lanka has a market share of 1.26% in the Brazil market. Sri Lanka experiences an 18% tariff rate for

this product.

Table 6.8 Apparel and clothing accessories of plastic

2008 2009 2010 2011 2012 Avg. growth rate

2008-2012 (%)

Total imports to

Brazil (US$ ‘000) 14,562 18,572 25,071 42,909 48,871 32.5

Exports by Sri

Lanka to Brazil

(US$ ‘000) 161 148 411 700 618 42.4


0.8%

1.64%

1.63%

1.26%


6.9 Other manufacturing items-Measuring or checking instruments etc…

Sri Lanka experiences a 10.67% tariff rate which is similar to rates faced by its main competitors. We

currently maintain a small market share of 0.11% for the product. However it should be noted that our

export revenue from these products displays an increasing trend over the time period.


Table 6.9 Other manufacturing items-Measuring or checking instruments etc…

2008 2009 2010 2011 2012 Avg. growth rate

2008-2012 (%)

Total imports to

Brazil (US$ ‘000) 293,844 257,632 281,789 369,573 372,655 8.3

Exports by Sri

Lanka to Brazil

(US$ ‘000) 334 173 366 247 408 7.5


0.07%

0.13%

0.07%

0.11%


6.10 Electrical & Electronic products -Transformers etc.

Sri Lanka has shown a significant increase in its share in the Brazil market by registering a 36.6% of

average annual rate of growth during the period under review. Electrical and electronic products are

also demanded as intermediate products by the Brazilian economy.

Table 6.10 Electrical & Electronic products-Transformers etc

2008 2009 2010 2011 2012 Avg. growth rate 2008-2012

(%)

Total imports

to Brazil (US$

‘000) 82,608 58,353 72,631 82,831 80,672 3.0

Exports by Sri

Lanka to Brazil

(US$ ‘000) 48 287 295 309 289 36.6

Sri Lanka’s

share

0.59%

0.50%

0.41%

0.37%

0.36%


6.11 Activated carbon

Sri Lanka has a 1.17% market share for this product and exports were gradually increasing from 2008

onwards. Currently we face a tariff rate of 12% for the product. Mexico being one of a major exporter of

this product faces a reduced tariff rate.


Table 6.11 Activated carbon

2008 2009 2010 2011 2012 Avg. growth

rate 2008-2012

(%)

Total imports

to Brazil (US$

‘000) 14,350 14,657 18,633 20,464 19,613 9.5

Exports by Sri

Lanka to Brazil

(US$ ‘000) 74 398 711 349 230 21.3

Sri Lanka’s

share

0.52%

2.72%

3.82%

1.71%

1.17%


6.12 Ceramic & Porcelain Products

Sri Lanka currently maintains a market share of 0.23% which is a small percentage. However our export

revenue from the product was gradually increasing from US $ 0.9 million to US $ 1.73 million over the

selected time period. Sri Lanka faces a tariff rate of 20% which is similar to tariff rates faced by its main

competitors.

Table 6.12 Ceramic & Porcelain Products

2008 2009 2010 2011 2012 Comp. growth rate 2008-2012

(%)


31,361 27,947 45,861 70,107 75,944 19.35

Exports by Sri Lanka to Brazil (US$ ‘000)

90 67 0 216 173 13.96

Sri Lanka’s share

0.29%

0.24%

-

0.31%

0.23%


6.13 Spices- Nutmeg

According to the available statistics we have started to export Nutmeg to Brazil in 2012. However we

have captured a market share of 4.86% which is a very good achievement. Most of the countries face


the same tariff rate of 10%. Paraguay being one of a major exporter of this product faces a reduced tariff

rate.

Table 6.13 Spices- Nutmeg

2008 2009 2010 2011 2012

Total imports to

Brazil (US$ ‘000) 0 0 0 0 3,130

Exports by Sri

Lanka to Brazil

(US$ ‘000) 0 0 0 0 152

Sri Lanka’s share -

-

-

-

4.86%


6.14 Tea- black tea

Sri Lanka is a largest exporter of tea to the Brazil market. Currently we have a market share of 17.52%

for the Black Tea. However our main competitors include USA, Germany, UK, France, Spain, and

Argentina, most of who don’t grow tea in their respective countries. Sri Lanka should promote its well

established brand name of Ceylon Tea in the Brazilian market to capture a higher market share. Sri

Lanka faces a tariff rate of 10% for the product.

Table 6.14 Tea- black tea

2008 2009 2010 2011 2012 Avg. growth rate 2008-2012

(%)

Total imports to

Brazil (US$ ‘000) 325 414 605 570 759 20.1

Exports by Sri

Lanka to Brazil

(US$ ‘000) 25 13 7 40 133 44.6

Sri Lanka’s share 7.45% 3.14% 1.16% 7.02% 17.52%



6.15 Fruits

According to the available statistics we have started to export Fruits to Brazil in 2012. Sri Lanka faces a

tariff rate of 10%. However many of our main competitors have been granted a preferential tariff rates

such as Mexico (8%), Chile(0%), Argentina (0%), Uruguay(0%) and Portugal(0%)

Table 6.15 Fruits

2008 2009 2010 2011 2012

Total imports to

Brazil (US$ ‘000) 784 173 1,008 2,031 4,985

Exports by Sri

Lanka to Brazil

(US$ ‘000) 0 0 0 0 122

Sri Lanka’s share - - - - 2.45%


7.0 POTENTIAL EXPORTABLE PRODUCTS TO BRAZIL MARKET

Following table shows the products which have been identified as potential exportable products to the

Brazil market. These products are not currently exported to Brazil by Sri Lanka. However Sri Lanka

exports those products to other countries and are well demanded by Brazil as well.

Table 7.0 Potential exportable products to Brazil market

HS code Products Sri Lanka’s exports to the world (US$) 2012 data

Total imports to Brazil (US$) 2012 data

'03 Fish, crustaceans, molluscs, aquatic invertebrates

19,569,839 1,158,483,000

‘8544 Insulated wire/cable 3,887,226 870,150,000

'64 Footwear, gaiters and the like, parts thereof

1,558,689 613723,000

'70 Glass and glassware 1,154,290 811,875,000

'54 Manmade filaments 847,510 1,498,725000

'60 Knitted or crocheted fabric 1,943,580 482916000



Following diagrams shows how the Brazilian total import market for each of these products has changed

over time. The import of these products to Brazil shows an increasing trend over the past few years.

(Source: ITC Data base)

Fig 7.0.1 Fish, crustaceans, mollusks, aquatic invertebrates

Fig 7.0.2 Insulated wire/cable

Fig 7.0.3 Footwear, gaiters and the like, parts thereof

0

200

400

600

800

1,000

1,200

1,400

2010 2011 2012

US

$ m

illi

on

s

0

200

400

600

800

1,000

1,200

2010 2011 2012

US

$ m

illi

on

s

0

100

200

300

400

500

600

700

800

2010 2011 2012

US

$ m

illi

on

s


Fig 7.0.4 Glass and glassware

Fig 7.0.5 Man made filaments

Fig 7.0.6 Knitted or crocheted fabric

0

200

400

600

800

1,000

1,200

2010 2011 2012

US

$ m

illi

on

s

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2010 2011 2012

US

$ m

illi

on

s

0

100

200

300

400

500

600

2009 2010 2011 2012

US

$ m

illi

on

s


8. BARRIERS TO TRADE

Following tables illustrate the import tariff rates applied by Brazilian government for the selected

products (products which are already imported by Brazil from Sri Lanka).

8.1 Average tariff applied by Brazil for Industrial and Surgical Gloves of rubber

Following table summarizes the import tariff rates imposed by Brazil for Sri Lanka and for the main

competing countries of Sri Lanka. Applied tariff year is taken as 2012.

Table 8.1 Average tariff applied by Brazil for Industrial and Surgical Gloves of rubber

Country

Average tariff applied by Brazil (for HS 4015)

Ranking based on the value of imports by Brazil

Sri Lanka 30.52% 4

Malaysia 30.52% 1

Thailand 30.52% 2

Uruguay 0% 3

China 30.52% 5

United States of America 30.52% 6

Indonesia 30.52% 7

Korea 30.52% 8

Slovenia 30.52% 9

India 30.52% 10

Viet Nam 30.52% 11

Source: ITC Normalized trade matrix

8.2 Average tariff applied by Brazil for Woven Fabrics



Table 8.2Average tariff applied by Brazil for Woven Fabrics

Country


Ranking based on the value of imports by Brazil

Sri Lanka 18% 10

Indonesia 18% 1

Turkey 18% 2

Thailand 18% 3

India 18% 4


Austria 18% 5

Croatia 18% 6

Germany 18% 7

Viet Nam 18% 8

Bangladesh 18% 9

Malaysia 18% 11


8.3 Average tariff applied by Brazil for Apparel products


competing countries of Sri Lanka. Applied tariff year is taken as 2012. Sri Lanka is in the highest tariff

band for these products.

Table 8.3 Average tariff applied by Brazil for Apparel products

Country

Average tariff applied by Brazil

(for HS 61& 62)

Ranking based on the value of imports by

Brazil

Sri Lanka 35% 18

Argentina 0% 1

Bangladesh 35% 2

Cambodia 35% 3

China 35% 4

India 35% 5

Indonesia 35% 6

Italy 35% 7

Hong Kong 35% 8

Paraguay 0% 9

Peru 0% 10

Portugal 35% 11

Viet Nam 35% 12

Spain 35% 13

Pakistan 35% 14

Mexico 28% 15

Turkey 35% 16

Morocco 35% 17

United States of America 35% 19

France 35% 20

Thailand 35% 21

Malaysia 35% 22

Chile (Not in the top ten competitors’ list)

0%



8.4 Average tariff applied by Brazil for Rubber tyres and tubes



Table 8.4 Average tariff applied by Brazil for Rubber tyres and tubes

Country


(for HS 4011)

Ranking based on the value of

imports by Brazil

Sri Lanka 14.64% 30

China 14.64% 1

Argentina 0% 2

USA 14.64% 3

Colombia 0% 4

Japan 14.64% 5

Czech Republic 14.64% 6

Thailand 14.64% 7

Chinese Taipei 14.64% 8

Korea 14.64% 9

France 14.64% 10

Chile and Uruguay (Not in the top ten competitors’ list)

0%


8.5 Average tariff applied by Brazil for Solid or cushion tyres


competing countries of Sri Lanka. Applied tariff year is taken as 2012. Sri Lanka faces a higher tariff rate

among its main competitors.


Table 8.5 Average tariff applied by Brazil for Solid or cushion tyres

Country



imports by Brazil

Sri Lanka 16% 1

Argentina 0% 2

Korea 16% 3

China 16% 4

Japan 16% 5

France 16% 6

Vietnam 16% 7

India 16% 8

Italy 16% 9

Romania 16% 10

Taipei 16% 11



8.6 Average tariff applied by Brazil for Natural Rubber



Table 8.6 Average tariff applied by Brazil for Natural Rubber


Country


(for HS 4001)


imports by Brazil

Sri Lanka 4% 12

Indonesia 4% 1

Thailand 4% 2

Malaysia 4% 3

Viet Nam 4% 4

Côte d'Ivoire 4% 5

Singapore 4% 6

Guatemala 4% 7

Cameroon 4% 8

Liberia 4% 9

Nigeria 4% 10


8.7 Average tariff applied by Brazil for Desiccated Coconut



Table 8.7 Average tariff applied by Brazil for Desiccated Coconut


8.8 Average tariff applied by Brazil for Coconut Oil


competing countries of Sri Lanka. Applied tariff year is taken as 2012. There are only 8 countries

exporting Coconut oil to Brazil. Paraguay faces a 0% tariff rate. Other than that all countries face a 10%

tariff rate.

Country



imports by Brazil

Sri Lanka 10% 7

Indonesia 10% 1

Philippines 10% 2

Thailand 10% 3

Viet Nam 10% 4

Singapore 10% 6

Peru 0% 8

Belgium 10% 9

Angola 10% 10

Argentina 0% 11

Japan 10% 12


Table 8.8 Average tariff applied by Brazil for Coconut Oil


8.9 Average tariff applied by Brazil for Electrical & Electronic products


competing countries of Sri Lanka. Applied tariff year is taken as 2012. Sri Lanka experiences a 9.33%

tariff rate which is the same as that faced by its main competitors.

Table 8.9 Average tariff applied by Brazil for Electrical & Electronic products

Country

Average tariff applied by

Brazil (for HS 151311)


imports by Brazil

Sri Lanka 10% 4

India 10% 1

Philippines 10% 2

China 10% 3

Australia 10% 5

Germany 10% 6

USA 10% 7

Paraguay 0% 8

Country



imports by Brazil

Sri Lanka 9.33% 25

Italy 9.33% 1

Germany 9.33% 2



8.10 Average tariff applied by Brazil for Apparel and clothing accessories of plastic



Table 8.10 Average tariff applied by Brazil for Apparel and clothing accessories of plastic


Sweden 9.33% 3

Spain 9.33% 4

France 9.33% 5

Switzerland 9.33% 6

Argentina 0% 7

Netherlands 9.33% 8

Japan 9.33% 9

USA 9.33% 10

Country



imports by Brazil

Sri Lanka 18% 5

China 18% 1

Colombia 0% 2

Hong Kong 18% 3

Korea 18% 4

USA 18% 6

Pakistan 18% 7

Italy 18% 8

Taipei 18% 9

Thailand 18% 10

Japan 18% 11


8.11 Average tariff applied by Brazil for Other Manufacturing items


competing countries of Sri Lanka. Applied tariff year is taken as 2012. Sri Lanka experiences a 10.67%

tariff rate which is the same as that experienced by its main competitors.

Table 8.11 Average tariff applied by Brazil for Other Manufacturing items


8.12 Average tariff applied by Brazil for Activated carbon


competing countries of Sri Lanka. Applied tariff year is taken as 2012. Sri Lanka is in the highest tariff

band.

Country

Average tariff applied by Brazil (for

HS 903180)


imports by Brazil

Sri Lanka 10.67% 36

USA 10.67% 1

Germany 10.67% 2

Japan 10.67% 3

China 10.67% 4

Italy 10.67% 5

France 10.67% 6

Korea 10.67% 7

Canada 10.67% 8

UK 10.67% 9

Sweden 10.67% 10


Table 8.12 Average tariff applied by Brazil for Activated carbon


8.13 Average tariff applied by Brazil for Ceramic & Porcelain products


competing countries of Sri Lanka. Applied tariff year is taken as 2012. Sri Lanka faces a tariff rate of 20%

which is the same as that faced by its main competitors.

Table 8.13 Average tariff applied by Brazil for Ceramic & Porcelain products

Country

Average tariff applied by Brazil (for HS

380210)


imports by Brazil

Sri Lanka 12% 7

USA 12% 1

China 12% 2

France 12% 3

Mexico 9.6% 4

Netherlands 12% 5

Indonesia 12% 6

Malaysia 12% 8

UK 12% 9

India 12% 10

Philippines 12% 11

Country


HS 691110)


imports by Brazil

Sri Lanka 20% 9

China 20% 1



8.14 Average tariff applied by Brazil for Spices (Nutmeg)



Table 8.14 Average tariff applied by Brazil for Spices (Nutmeg)


Portugal 20% 2

Hong Kong 20% 3

UAE 20% 4

Thailand 20% 5

France 20% 6

Germany 20% 7

Italy 20% 8

Japan 20% 10

Spain 20% 11

Country


(for HS 0908)


imports by Brazil

Sri Lanka 10% 7

India 10% 1

Indonesia 10% 2

UAE 10% 3

Guatemala 10% 4

Spain 10% 5

Italy 10% 6

Nepal 10% 8

Netherland 10% 9

Angola 10% 10

Paraguay 0% 11


8.15 Average tariff applied by Brazil for Tea (Black Tea)



Table 8.15 Average tariff applied by Brazil for Tea (Black Tea)


8.16 Average tariff applied by Brazil for Fruits


competing countries of Sri Lanka. Applied tariff year is taken as 2012. Sri Lanka faces a tariff rate of 10%.

However, many of our main competitors such as Mexico (8%), Chile (0%), Argentina (0%), Uruguay (0%)

and Portugal (0%) face a preferential tariff rates.

Country

Average tariff applied by Brazil (for HS

090230)


Brazil

Sri Lanka 10% 5

UK 10% 1

France 10% 3

China 10% 4

Germany 10% 6

USA 10% 7

Argentina 0% 8

Hong Kong 10% 9

Canada 10% 10

Poland 10% 11

Lebanon 10% 12


Table 8.16 Average tariff applied by Brazil for Fruits


9. IMPORT TARIFF RATES FOR POTENTIAL PRODUCTS

Following tables illustrates the import tariff rates applied by Brazilian government for products which

are not currently exported by Sri Lanka to Brazil but which have a potential in the Brazilian market.

9.1 Average tariff applied by Brazil for Fish, crustaceans, mollusks, aquatic invertebrates

Following table summarizes the import tariff rates applicable for Sri Lanka and for the main competing

countries of Sri Lanka in the Brazilian market. Applied tariff year is taken as 2012.

Country


(for HS 08119000)


imports by Brazil

Sri Lanka 10% 7

Mexico 8% 1

Israel 10% 2

Chile 0% 3

China 10% 4

Argentina 0% 5

USA 10% 6

Indonesia 10% 7

Uruguay 0% 8

Portugal 0% 9

Poland 10% 10


Table 9.1 Average tariff applied by Brazil for Fish, crustaceans, mollusks, aquatic invertebrates


9.2 Average tariff applied by Brazil for Footwear, gaiters and the like, parts there of


countries of Sri Lanka in the Brazilian market. Applied tariff year is taken as 2012. Sri Lanka faces the

highest tariff band.

Country


(for HS 03)


Brazil

Sri Lanka 9.15% -

Chile 0% 1

China 9.16% 2

Norway 9.16% 3

Argentina 0% 4

Portugal 9.16% 5

Viet Nam 9.16% 6

Uruguay 0% 7

Morocco 9.15% 8


Spain 9.16% 10

Peru 0% 11

Chile 0% 12


Table 9.2 Average tariff applied by Brazil for Footwear, gaiters and the like, parts there of


9.3 Average tariff applied by Brazil for Glass and glassware


countries of Sri Lanka in the Brazilian market. Applied tariff year is taken as 2012

Country


(for HS 64)


imports by Brazil

Sri Lanka 33.74% -

Viet Nam 33.74% 1

Indonesia 33.74% 2

China 33.74% 3

Paraguay 0% 4

Italy 33.74% 5

India 33.74% 6

Thailand 33.74% 7

Mexico 26.99% 8

Argentina 0% 9

Bangladesh 33.74% 10


Table 9.3 Average tariff applied by Brazil for Glass and glassware


9.4 Average tariff applied by Brazil for Insulated wire/cable

Following table summarizes the import tariff rates imposed applicable for Sri Lanka and for the main

competing countries of Sri Lanka in the Brazilian market. Applied tariff year is taken as 2012.

Table 9.4 Average tariff applied by Brazil for Insulated wire/cable

Country


(for HS 70)


Brazil

Sri Lanka 11.86% -

China 11.86% 1

United States of America

11.86% 2

Mexico 9.32% 3

Colombia 0.29% 4

France 11.86% 5

India 11.86% 6

Germany 11.86% 7

Italy 11.86% 8

United Arab Emirates 11.86% 9

Czech Republic 11.86% 10

Country


(for HS 8544)


imports by Brazil

Sri Lanka 15.6% -

China 15.6% 1

United States of America

15.6% 2

Republic of Korea 15.6% 3



9.5 Average tariff applied by Brazil for Knitted or crocheted fabric



Table 9.5 Average tariff applied by Brazil for Knitted or crocheted fabric


Germany 15.6% 4

Japan 15.6% 5

Thailand 15.6% 6

Mexico 2.5% 7

France 15.6% 8

Argentina 0% 9

Italy 15.6% 10

Country


(for HS 60)


imports by Brazil

Sri Lanka 26% -

China 26% 1

Republic of Korea 26% 2

Uruguay 0% 3

Chinese Taipei 26% 4

Malaysia 26% 5

Spain 26% 6

Thailand 26% 7

Peru 0% 8

Malta 26% 9

Hong Kong, China 26% 10


9.6 Average tariff applied by Brazil for Manmade filaments



Table 9.6 Average tariff applied by Brazil for Manmade filaments


10. SRI LANKA’S EXPORTS TO BRAZIL IN THE FIRST QUARTER OF 2013 The Following table compares the performance of major products exported to the Brazil market during

the 1st quarter of 2012 and 2013.

Country


HS 54)


Brazil

Sri Lanka 20.3% -

China 20.3% 1

India 20.3% 2


Republic of Korea 20.3% 4

Argentina 0% 5

Indonesia 20.3% 6

United States of America 20.3% 7

Malaysia 20.3% 8

Netherlands 20.3% 9

Thailand 20.3% 10


Table 10.1 Comparison of Sri Lanka’s Exports to Brazil in the first quarter of 2013 with the exports in first quarter of 2012

(US $ Thousands)

Product 2012 Jan-March

2013 Jan-March

Industrial & Surgical Gloves of rubber (HS 401519)

2510

3127

Woven Fabrics (HS 551011)

2812

1293

Apparel Articles of apparel, accessories, knit or crochet (HS 61)

1024

1474

Apparel Articles of apparel, accessories, not knit or crochet (HS 62)

148

244

Rubber Tyres and Tubes (HS 4011)

340

1911

Rubber products Retreaded or used tire solid tire etc… (HS 4012)

1041

1348

Desiccated Coconuts (HS 080111)

880

88

Product 2012 Q1 Jan-March

2013 Q1 Jan-March

Electrical & Electronic products Dish washing machines; machinery for aerating bottles (HS 8422)

-

282

Natural rubber (HS 4001)

-

-

Plastic Products Apparel and clothing accessories (incl gloves) of plastic (HS 392620)

-

-


**Note: The above table was developed on the basis of the Sri Lanka’s Customs data available at EDB data base.

Other manufacturing items Measuring or checking instruments etc… (HS 903180)

11

261

Rubber Products Vulcanized rubber etc... (HS 4016)

17

41

Electrical & Electronic products Transformers etc. (HS 8504)

17

1

Activated carbon (HS 380210)

8

39

Product 2012 Q1

Jan-March 2013 Q1

Jan-March Ceramic & Porcelain Products Tableware and kitchenware (HS 691110)

28

102

Spices Nutmeg (HS 090811)

-

-

Tea Black tea (HS 090230)

2

20

Fruits (HS 08119000)

-

-

Coconut oil (HS 151311)

-

-


11. RECOMMENDATIONS

This analysis focuses on the Brazilian economy as a potential export destination for Sri Lanka. After

analyzing the Brazilian market, it has been identified that 19 products which are being currently

exported to Brazil by Sri Lanka are capable of generating higher revenue to Sri Lanka. Even though there

is a high demand for these products in Brazil, Sri Lanka has not been able to exploit the full potential due

to supply side constraints and also due to trade barriers such as high tariffs as well. Products currently

exported to Brazil with more opportunities to expand and potential exportable products to Brazil market

which are not currently exported by Sri Lanka have also been identified.

It is noteworthy that Sri Lanka’s export to Brazil was growing at a faster rate compared to the Sri Lanka’s

growth in exports to EU and USA. Furthermore our exports to Brazil show a continuous increase, except

for a minor decrease in 2009, over the selected time period. But our exports to the other two selected

regions have remained more or less stagnant during the same period. Therefore concentrating on the

Brazil market would provide opportunities to increase Sri Lankan exports to this market.

Recommendations to expand exports to the Brazilian market are given below.

Sri Lanka is not offered any form of tariff preference by the Brazil. Therefore, work closely with

relevant agencies such as Sri Lanka High Commission in Brazil to solve the prevailing issues

related exporters and liaise with Ministry of External affairs and Department of Commerce to

examine the possibility of obtaining preferential access for our products in the Brazilian market.

Launching of an efficient Promotion Campaign in Brazil would be highly beneficial

Conduct awareness programmes on “Opportunities available in Brazil Market” for Sri Lankan

Exporters “. This will be done by the EDB in collaboration with other relevant institutions.

The products to be promoted in Brazil are :

Industrial & Surgical Gloves of rubber (HS 401519)

Woven Fabrics (HS 551011)

Apparel - Articles of apparel, accessories, knit or crochet (HS 61)

Apparel - Articles of apparel, accessories, not knit or crochet (HS 62)

Rubber Tyres and Tubes (HS 4011)

Rubber products Retreaded or used tire solid tire etc… (HS 4012)

Desiccated Coconuts (HS 080111)

Electrical & Electronic products Dish washing machines; machinery for aerating bottles

(HS 8422)

Natural rubber (HS 4001)

Plastic Products Apparel and clothing accessories (incl gloves) of plastic (HS 392620)

Other manufacturing items Measuring or checking instruments etc… (HS 903180)

Rubber Products Vulcanized rubber etc... (HS 4016)

Electrical & Electronic products Transformers etc. (HS 8504)

Activated carbon (HS 380210)


Ceramic & Porcelain Products Tableware and kitchenware (HS 691110)

Spices Nutmeg (HS 090811)

Tea Black tea (HS 090230)

Fruits (HS 08119000)

Coconut oil (HS 151311)

Carry out Publicity / trade promotion programmes in Brazil about Sri Lanka as a quality supplier

This analysis has further identified the following 6 product categories which are not currently being

exported to Brazil by Sri Lanka, but has high potential to penetrate the Brazil market.

Fish, crustaceans, molluscs, aquatic invertebrates(HS 03)

Insulated wire/cable (HS8544)

Footwear, gaiters and the like, parts thereof (HS 64)

Glass and glassware (HS 70)

Manmade filaments (HS 54)

Knitted or crocheted fabric (HS 60)

A high demand exists in the Brazil market for these products. If supply side constrains to export these

products to Brazil market could be overcome, Brazil would be a major market to generate more foreign

exchange to Sri Lanka. Moreover diversifying our products to nontraditional market such as Brazil will

also reduces the dependency of Sri Lankan exports on EU and USA as well.

It is also suggested that the potential Sri Lankan exporters be identified and be informed about the

opportunities in the Brazil market and also give them possible support to enhance their trade with

Brazil. Supplying detailed information of our exportable products to potential buyers in Brazil is very

important. Launching an efficient promotion campaign would be highly beneficial in this regard.

Prepared by:

Sanjeewa Udara Rathnasekara - Assistant Director, EDB

Disclaimer:

The Sri Lanka Export Development Board, (EDB), has taken every care in the preparation of the content of

this report, but the EDB cannot be held responsible for any errors, defects, lost profits, or other

consequential damages arising from the use of any information obtained either directly or indirectly from

this report. The EDB accepts no liability whatsoever.

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