The recent election of a new president in Brazil, Jair Bolsonaro, is expected to improve the country's battered economy and to generate more competition by opening up the Brazilian market, says Heitor Klein, executive president of the Brazilian shoe industry association, Abicalçados.
He says the cost of making shoes in Brazil may be reduced by cuts on taxes and logistical costs. Klein also feels that the Brazilian shoe industry is ready to face the challenge of lower import duties, provided that the international competition is based on equal conditions.
In the shorter term, Abicalçados expects that the trade tensions between the U.S. and China, coupled with a more stable economic environment, will lead U.S. buyers to make more purchases in Brazil, as in the distant past, leading to a gradual recovery on the export front during the second half of this year.
The association reports that some major foreign buyers returned after an absence of several years to the Couromoda trade show in São Paulo on Jan. 14-17, where the general mood was said to have been positive, thanks also to an increase in domestic retail sales in the last three months of last year after a long period of uncertainty.
Brazil's shoe exports recovered in October and November, as compared to the same months of the previous year, but they suffered a decline in December. For all of 2018, Abicalçados reports that they fell by 10.8 percent in volume and by 10.5 percent in value, down to 113.5 million pairs worth $976 million. The declines were largely attributed to volatile foreign exchange rates.
The annual figures show decreases of 5 percent in volume and 12.2 percent in value in Brazil's exports to the U.S., which remained the biggest destination in terms of value. Exports to Argentina, the biggest market in terms of volume, they increased by 2 percent in volume but dropped by 5.2 percent in value.