Brazil-Iran Relations Set to Boost as Tehran Advances BRICS Admission Process

Wednesday, October 19, 2022

Ahmed Adel, Cairo-based geopolitics and political economy researcher

According to the president of the joint chamber of Iran and Brazil, Fakhruddin Amerian, a Brazilian bank “is ready to assist” any Iranian wanting to invest in Brazilian agriculture. The Brazilian bank, whose name has not been made public yet, said it was willing to contribute 80% of the funds with any Iranian investors willing to contribute the remaining 20%. This comes only months after Iran applied to the BRICS group of Brazil, Russia, India, China and South Africa despite pressure from Washington to impose sanctions on countries that oppose US hegemony.

This was confirmed by the Iranian news agency Tasnim, which emphasises that the authorities in the Islamic Republic are looking for ways to ensure food security. It is for this reason that the South American country, in addition to being a BRICS member, has received specific attention. Although Iran has fertile soil in some areas, there are problems such as a lack of crop rotation and rapid soil erosion.

“For communities to thrive sustainably and to fight poverty, food security is seen as a major concern of our day,” the publication said.

Tasnim explained that Iran wants to use the resources, capabilities and facilities of other nations to produce essential agricultural products to maintain and increase its food security. The country has the goal of becoming self-sufficient in strategic agricultural products, including wheat, oilseeds and animal feed, which requires adequate water resources.

In the last two decades, Brazil has consolidated itself as a direct competitor of the US in the global crop market. Brazil has expansive fields, low farmland prices, and an abundance of sunlight and natural resources. Due to these factors, many farmers and agricultural manufacturers have expanded their operations into Brazil to take advantage of the industry’s rapid growth.

Iran is currently importing livestock inputs, soybeans, corn, soybean meal, sugar, meat and fruit concentrates from Brazil. Amerian also explained that preliminary steps are being taken to import cotton from Brazil.

According to the Brazilian Association of Cotton Producers (ABRAPA), there is no direct export of cotton from Brazil to Iran. If the partnership is established, it will be possible for Brazil to export up to 120,000 tons of cotton per year to Iran. At the moment, Iran buys cotton from countries like Uzbekistan and India, but not Brazil despite being the fourth largest cotton producer in the world, behind only India, China and the US.

Since 2019, Brazil has imported urea from Iran, an input that is used in the manufacture of fertilisers. In 2021, the Iranians supplied 4.5% of the total volume of urea imported by the country and, in 2020, they were the fourth largest supplier of the input to Brazil.

Amerian added that the Brazilian agriculture minister expressed a desire to buy Iranian fruits and saffron during his visit to Iran. According to the agreement made by the two parties, Iran will soon start exporting fruit, including dates and raisins, to Brazil. He also mentioned the effects of sanctions, stating that there are still banking problems with Brazil.

“Our imports from Brazil are significant and a significant amount of our needs in terms of corn and soybeans are supplied from Brazil, but it is appropriate that we raise our exports to half of our imports from the country,” Amerian explained.

Brazil’s Foreign Minister Carlos Alberto Franco Franca described Iran as a reliable economic partner for his country during their meeting on the sidelines of the UN General Assembly in New York in September. At the time, Franca expressed Brazil’s readiness to increase trade exchanges and carry out previous agreements with Iran.

For his part, Iranian Foreign Minister Hossein Amirabdollahian said during the meeting that the 120-year history of relations between Iran and Brazil is a valuable asset in the promotion of cooperation in various fields. He also urged the two governments to support private companies as they will enhance economic relations and trade exchanges.

Perhaps the most important aspect of their UNGA sideline meeting was discussing the need to increase cooperation in the fields of technology and agriculture, as well as to back the role of BRICS in strengthening multilateralism in the international arena.

It is recalled that Iran, which holds the world’s second largest gas reserves, applied to join BRICS in June. Undoubtedly as part of Iran’s application process, increasing trade with member states of BRICS will be beneficial, which is why the Islamic Republic is seeking to strengthen ties with Brazil. This is especially for the fact that Brazil has resisted pressure from Washington to severely sanction Russia, a policy it will likely maintain with Iran too.

Source: InfoBrics