(Bloomberg) -- A dispute over fueling Iranian ships stranded off the coast of Brazil is putting the spotlight on the South American agricultural giant’s approach to the Middle East, a major buyer of Brazilian corn, sugar and poultry.
President Jair Bolsonaro has shifted Brazil’s traditionally neutral foreign policy position to be more aligned with the U.S. and Israel. One of his first announcements after winning elections last year was an intention to move the Israeli embassy to Jerusalem. While that irked Brazilian companies that depend on Middle East markets, events over the past few days intensified their unease.
State-controlled Petroleo Brasileiro SA refused to refuel two Iranian ships for fear of U.S. sanctions, sparking threats from Iran to halt imports. While Petrobras, as the oil company is known, is now complying with a court order to proceed with fueling, trade concerns linger.
Iran is the fourth-biggest importer of Brazilian agricultural goods, accounting for a third of all of the nation’s corn shipments. The Middle East bought $7.2 billion, or 8.5%, of agriculture exports from Brazil last year.
“Having this issue solved is good news to us,” Sergio Mendes, general director at the grain-export group Anec, said by telephone. “The vast majority of Brazil’s grain production goes to Asia and the Middle East. Trade relations have nothing to do with politics.”
Brazil should try to reconnect with the region, said Ali Ahmad Saifi, executive director at CDIAL Halal, a company that accounts for about 60% of all the chicken that’s certified in the country in accordance to Islamic law.
President Bolsonaro is planning to visit the United Arab Emirates, Saudi Arabia and Qatar in October.
“Brazil has the opportunity to keep great relationships with everyone,” Saifi said. “We don’t need to import foreign problems.”
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