WorldCity, Annual Report: No. 8 Brazil- New U.S. gateway for Brazil | Connecting Local Business Leaders To The Global Economy

Annual Report: No. 8 Brazil- New U.S. gateway for Brazil

June 14th, 2006

Houston is dramatically boosting its trade relationship with South America’s largest economy.

Is the Houston-Galveston Customs District taking trade away from Miami? When it comes to commerce with Brazil, the answer is "yes."

Commerce between the Customs district and South America’s biggest country rose a remarkable 34 percent in 2005 to $4.9 billion. Miami remains Brazil’s most important U.S. gateway, handling nearly $9 billion in Brazilian trade last year. That reflected a 2 percent gain.

The upswing with Brazil gives Houston a safe lead on Brazil’s third most important U.S. Customs District: New York. Brazil’s trade with New York rose 26 percent to reach $3.9 billion.

Although business between southeast Texas ports and Brazil flourished last year, Houston still posted a $288 million trade deficit as imports rose to $2.6 billion from $1.8 billion. Exports were $2.3 billion.

Houston’s most important import from Brazil, not surprisingly, was crude oil. The $252 million in Brazilian crude that reached the Houston Customs District in 2005 was double that of the year earlier. Brazil’s national oil company, Petrobras, had a record-breaking year in 2005, pumping 1.8 million barrels a day off the east coast of the country.

Rank	Top Houston Imports	Value	Change
	Total all commodities	$2,584,640,025.00	41.90%
1	Crude oil from petroleum	$252,049,569.00	110.40%
2	Cyclic hydrocarbons	$222,663,336.00	41.20%
3	Self-propelled heavy construction machinery	$199,044,106.00	47.70%
4	Motor vehicles for transporting people	$134,993,971.00	7.00%
5	Parts of electric motors, generators & sets	$117,074,815.00	483.00%
6	Aluminum ores and concentrates	$85,779,082.00	35.10%
7	Ethers, ether-alcohols, alcohol peroxides	$78,604,889.00	195.50%
8	Compressors and pumps	$72,775,921.00	16.80%
9	Rubber tires	$72,186,085.00	2.60%
10	Granite monuments	$69,675,400.00	59.10%
11	Aluminum, unwrought	$62,100,032.00	-32.90%
12	Iron and steel pipes and tubing	$59,326,174.00	103.90%
13	Wood, tongue & groove, shaped	$51,603,815.00	-24.20%
14	Tractors	$50,030,674.00	49.30%
15	Oils derived from high temperature coal tar	$45,009,694.00	82.20%
16	Seamless iron tubes and pipes	$44,007,865.00	45.40%
17	Ethyl alcohol	$40,173,536.00	146.70%
18	Coffee	$38,952,799.00	70.00%
19	Oil, not crude	$33,162,496.00	88.10%
20	Wood, sawed or chipped, 6+ meters thick	$32,662,432.00	-46.30%
21	Glazed ceramic tiles	$31,656,125.00	8.20%
22	Electric motors, generators, not sets	$28,782,905.00	317.00%
23	Power supplies, transformers	$28,599,902.00	1.10%
24	Petroleum gases, other gaseous hydrocarbons	$27,209,923.00	NA
25	Zinc, unwrought	$21,969,982.00	84.70%

Joo Alberto Quintaes, a Brazilian trade representative in Houston, said the oil giant has been exporting to the United States in response to demand in markets such as Texas and California. The company’s Houston subsidiary, Petrobras America Inc., aims to supply the U.S. market with 100,000 to 150,000 barrels per day.

In addition, he noted that certain grades of crude that cannot be processed in Brazilian refineries are shipped to South Texas.

Quintaes said Brazil is looking for ways to deepen its ethanol penetration of the U.S. fuel market. As a major sugar-cane producer, the South American country has been using alcohol fuel in motor vehicles for years. Brazil imports of ethanol, of course, would face tough opposition from the powerful Midwestern corn lobby, but Quintaes said sugar cane bagasse offers greater yields of ethanol and produces a final product that is more efficient than methyl tertiary-butyl ether (MTBE) extracted from corn.

In 2005, ether alcohols made one of the biggest leaps among imports from Brazil. They reached nearly $79 million, a 196 percent jump from 2004. Texas importers also bought more than $40 million-worth of ethyl alcohol, up 146 percent from 2004.

Apart from energy, Houston imported a significant quantity of heavy construction machinery and passenger cars. That included $199 million in bulldozers, levelers, excavators and graders, a gain of nearly 48 percent when compared with 2004.

Some $135 million in Brazilian passenger cars also made their way to Houston, up from $126 million a year earlier.

Brazil produces Volkswagen and General Motors passenger cars and trucks in the state of So Paulo. Overall, 5 percent of Brazil’s shipments of vehicles go to the United States, according to Anfavea, Brazil’s motor vehicle manufacturers association.

Other important imports through Houston included nearly $73 million in compressors used in refrigerating equipment, $72 million in rubber tires and almost $70 million in granite, marble and other flooring materials.

Houston’s imports of coffee, one of Brazil’s top agricultural products, rose 70 percent to nearly $40 million.

Rank	Top Houston Exports	Value	Change
	Total all commodities	$2,296,360,694.00	26.20%
1	Machinery parts	$306,292,064.00	51.10%
2	Oil, not crude	$135,245,182.00	502.50%
3	Cyclic hydrocarbons	$114,419,512.00	-2.50%
4	Motor vehicles for transporting goods	$98,760,082.00	124.90%
5	Synthetic rubber, including butadiene	$89,247,926.00	51.20%
6	Polyethers, expoxides & polyesters, primary forms	$84,774,753.00	36.50%
7	Sodium Hydroxides; potassium hydroxides	$79,352,097.00	75.20%
8	Acrylic and methacrylic acids, etc.	$73,972,931.00	24.20%
9	Acyclic alcohols	$73,228,387.00	4.60%
10	Self-propelled heavy construction machinery	$66,497,397.00	10.40%
11	Acetic acids, vinyl acetates, etc.	$60,707,703.00	7.10%
12	Insecticides, fungicides	$55,077,943.00	-11.60%
13	Organo-sulfur compounds	$51,336,876.00	0.40%
14	Heterocyclic chemical compounds	$48,970,596.00	1.30%
15	Polymers of ethylene	$37,446,283.00	24.60%
16	Polyurethanes	$37,175,173.00	93.10%
17	Halogenated derivatives of hydrocarbons	$28,411,632.00	31.50%
18	Petroleum products	$28,239,194.00	136.70%
19	Regional jet parts	$23,713,079.00	290.90%
20	Tractors	$22,500,501.00	-3.70%
21	Lifting, handling, loading & unload machines	$22,493,392.00	46.50%
22	Nitrogen function compounds	$21,415,864.00	-3.10%
23	Anti-knock additives	$21,198,944.00	-21.30%
24	Chemical compounds	$20,726,494.00	182.10%
25	Machines for harvesting/cleaning agro products	$20,148,356.00	19.60%

When it came to exports, Houston shipped more than $306 million in parts for cranes, derricks and winches to Brazil. That was a 51 percent gain from last year.

Refined petroleum products were the second most important export, jumping sixfold to total $135.2 million. By contrast, exports of cyclic hydrocarbons such as styrene and xylene dropped 2.5 percent to $114 million.

Exports of U.S.-made motor vehicles soared to nearly $99 million. They were less than $44 million in 2004.