Fernando Pimentel, Brazilian minister of economic development, industry and foreign trade, promised during the Francal shoe show in São Paulo two weeks ago to implement more rigorous monitoring of certificates of origin as of this month for imported shoes by the Federal Revenue Service and other Brazilian government agencies. The monitoring process is set to last for six months, renewable for an additional three months, with provisional measures due to be taken within 60 days.

The minister made a similar pledge during the Couromoda shoe fair last January, but nothing has happened since. His new promise came after Milton Cardoso, who has been unanimously re-elected president of the Brazilian shoe industry association (Abicalçados) for the 2011-13 biennium, provided strong new evidence of circumvention of the severe anti-dumping duty of $13.85 per pair imposed by the Brazilian government from the beginning of 2010. He noted, among other things, that the official Brazilian import statistics for 2010 indicate that the country imported only 3,000 tons of footwear from China, equivalent to 9 million pairs, whereas the Chinese statistics show that 13,000 tons were shipped from China to Brazil, or the equivalent of 38 million pairs. Evidently, importers have been falsifying import documents, said Cardoso.

They have also let shoes and components sourced from China transit through other countries in order to avoid paying the duties, he added, pointing out that huge increases were recorded all of a sudden in the first five months of this year in shoe imports from improbable sources such as the U.S., Paraguay and Hong Kong, where not many shoes are manufactured. This was on top of big surges in imports from Vietnam and Indonesia, where the shoes were probably assembled from Chinese components.

Cardoso blamed an overall jump in Brazilian shoe imports of 47 percent in value and 21 percent in volume over the first five months for a decline in production since last October and the loss of 3,419 jobs in the Brazilian shoe industry between last April and May. On the other hand, rising wages in Brazil and the rising value of the Brazilian real, which are making Brazilian shoes less competitive in foreign markets, are leading some Brazilian companies to move some production abroad, especially to service foreign clients. While the real may go down again in the medium term, according to industry officials, the minimum wage in the national shoe industry is set to go up by about 10 percent next January.

Paquetà has started to make shoes in Santo Domingo per major foreign clients (see separate story on the company in the next issue). Another Brazilian shoe company is said to be studying a project in another Latin American country. Vulcabras, the big Brazilian shoe company run by Cardoso, is starting up a new factory in India, which is meant to initially make uppers for its own brand of athletic shoes, Olympikus.

A big Brazilian manufacturer of synthetic shoes, Piccadilly, was reported to be contemplating some production in Central America, but company officials said that this was just an idea and that there were no specific plans of this kind at this stage. They pointed out that Piccadilly recently started up a new factory in Brazil and that the company was experiencing continued strong demand from other Latin American countries in spite of an increase of nearly 30 percent in export prices in dollars.

Brazil remains the third-largest shoe manufacturer in the world, and the country's trade balance for footwear remained largely positive in the first five months of this year, with only 16.2 million pairs worth $178.9 million coming into the country and China representing 44 percent of the total import volume and 26 percent of the import value. However, because of the strengthening real, Brazil's shoe exports declined by 29.1 percent in volume and by 12.1 percent in value in the first five months of this year, down to 49.2 million pairs worth $551.8 million. The average export price per pair rose by 24 percent in terms of U.S. dollars, with increases in almost every major foreign market except for France and Germany, where it declined slightly.

Price-sensitive products such as thongs suffered the biggest sales declines in foreign markets, particularly in the U.S. American import figures show a drop of 70 percent in units from Brazil for the first few months of this year, most of it accounted for by plastic footwear.

Several Brazilian shoe manufacturers, especially the smaller ones, are reacting with a marked improvement in the style and quality of their products. Some of the most creative styles were presented in designers' showrooms outside the Francal show during the fair.

At the Francal show, Abicalçados presented a new version of its Brazilian Footwear internet portal that makes it easier for users to find the type of shoes that they may want to buy from Brazilian companies.