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Chickens: made in Brazil, sold in Iraq

Brazil’s direct exports to Iraq have exploded from virtually nothing before the American occupation to $107 million in 2008 to $250 million last year. And poultry is leading the charge.

SAO PAULO, Brazil — The Brazilians call it “frango” and the Iraqis call it “dajjaj,” but more than ever before, they’re referring to the same chickens.

Brazil’s direct exports to Iraq have exploded from virtually nothing before the American occupation to $107 million in 2008 to $250 million last year. And poultry is leading the charge. Chicken and anything it can be turned into now make up about 80 percent of those exports.

Brazilian government numbers show that Iraqi importers paid $199 million for 313 million pounds of wings, nuggets, giblets and the like. That alone would be about 10 pounds per Iraqi, but the actual number may be three times as high. According to the Brazil-Iraq Chamber of Commerce and Industry, which certifies Brazilian products heading to Iraq, two-thirds of exports actually enter through a third country, usually Kuwait.

In 2009, Iraq became the ninth largest importer of chicken from Brazil, up from 14th in the pecking order in 2008.

On the surface, the countries are unlikely trading partners: they don’t share a language or a culture, they’re on opposite sides of the world and Brazil produces its own oil. Furthermore, while the Lebanese and Syrians have huge communities in Brazil, the Iraqi immigrant population is miniscule, and there is no Iraqi ambassador in Brasilia (though there is an embassy).

But the partnership makes sense: until the American invasion in 2003, Iraqi imports were severely restricted by international sanctions. When trade opened up, the Iraqis were starting, if you will, from chicken scratch. The production and capacity of Brazilian companies has skyrocketed in the past decade and the country is hungry for new markets.

Brazil was a natural source of chicken for Iraq. Not only is it home to some of the largest meat and poultry companies in the world, like Brasil Foods, but the country has also been exporting chicken to the Middle East for decades, since at least the 1970s, and many companies already were accustomed to slaughtering animals according to Halal methods.

“When they talk about Iraq the first thing people think of is bombs, but there are also 30 million inhabitants who eat, who drink, who have daily lives,” said Jalal Chaya, president of the chamber. “The country is starting almost from zero. They only produce dates and petroleum. All the rest is imported.”

Chaya, an Iraqi Christian, moved from Kirkuk to Sao Paulo in 1978 at age 15, largely to escape obligatory military service. He estimates that there were about 50 Iraqi families in Brazil. Twenty-five years later, in the middle of a successful business career that ranged from selling go-karts to producing the Brazilian edition of the musical “Hair,” he helped found the chamber. Its 12 full-time employees in Brazil and a few more in Iraq help promote trade between the countries.

Chaya himself is not one of the full-timers; he is now in the underwear distribution business. But he is the face of the chamber, and considers his role as a go-between as crucial. “When I’m working with Brazilians, it’s as if I were Brazilian,” he said. “When I’m working with Iraqis it’s as if I were Iraqi.”

In his sharp suit and fluent but accented Portuguese, he looks every bit the self-made immigrant entrepreneur. “We know what Iraq needs, and we know what Brazil can provide,” he said. “Brazil has many more products that could be included in the market.”

He says that could include trucks and construction materials, but for now, it’s largely chicken. Other major exports, according to Brazilian government reports, include beef and beef products, tractors, bulldozers and sugar. (Ah, and very minor exports include $1,139 in cotton dresses and $4,820 of “waffles and wafers.”)

The chamber is also trying to attract construction companies — of which Brazil has plenty — to bid on a new project to construct 2,000 houses in Iraq. It has also helped to attract visits by Iraqi officials, including last year from the ministers of planning and industry. Chaya said the Iraqis are routinely amazed at the variety and scale of industrial production they see in Brazil.

The chamber is located in a well-appointed office in the posh Jardins neighborhood, and the reception area is decorated with Brazilian and Iraq flags and portraits of the country’s presidents, Luiz Inacio Lula da Silva and Jalal Talabani. It is getting ready to inaugurate Iraq’s first permanent showroom for Brazilian products in Sulaimaniyah, Kurdistan, a major entry point for cargo arriving by air from Europe and elsewhere in the Middle East. It will be called “Made in Brazil.”

Another goal is to shift indirect imports to direct ones, improving efficiency. Historically,  Brazilian products made their way into Iraq via Kuwait and other countries; this less efficient “triangular export” system accounted for $468 million in trade last year.

The chamber tracks these numbers since they are responsible for certifying that products are actually made in Brazil so they can enter Iraq — they once stopped a contraband shipment of eggs Jalal believes came from China.

Some Brazilians do have qualms about doing business with Iraq, but it’s not so much the business leaders as their families. “They’ll say to their wife, ‘I’m going to Iraq,'” said Chaya, “and the wives will respond ‘What are you talking about?’ It can cause a war in the home.”

Suggestion: have them nix the mention of Iraq, and say they’re headed overseas to visit a big chicken account.