According to Abicalçados - Brazilian Association of  Footwear Manufacturers – in the first half of the 2003, the country’s footwear exports increased 4% to US$ 737 million compared with the year previous.  Between January and May, the increase was 14% in volume terms, to 88.5 million pairs. In June, exports were up 5% by value on the year before to $121 million, and 3% up on the previous month. 

Abicalçados cites both changing seasonal buying patterns in the Northern hemisphere and the continuing recovery in the Argentine economy for the increases. For instance, during the January-May period, Argentina imported $18 million (2.28 million pairs). This compares with 866,000 pairs worth $ 6.4 million the year before.

Heitor Klein, managing-director of the Shoes from Brazil Programme, said that despite the gains made, revenues were still well short of the 20% increase for the full year set by Abicalçados at the beginning of 2003.  He added that progress was unlikely to be assisted in the second half if the dollar remained weak in relation to the Brazilian Real.

The ideal exchange rate for the shoe sector to operate in the international market was US$ 1.00 = R$ 3.30, Klien said.  In the meantime, volumes remained very much unchanged as footwear consumption in the USA, which accounts for 70% of the shoes exported from Brazil, was declining.  The change of season in the Northern hemisphere that starts in August was a particular cause for concern, Klien said. The dollar was also below the ideal level for international negotiations, he said, making it difficult for footwear producers to price their new collections.

Another worry was the price of components.  The fact that the prices of imported materials and petrochemical components was fixed to the value of the dollar several months ago, when it was worth R$ 3.80, meant businesses had been unable offset the downturn in their export revenues, brought about by the dollar's subsequent weakening, to approximately R$ 2.80.   “This is the main reason why it will be difficult to cost new orders and achieve competitive prices in the global market," Klein observed.

ABICALÇADOS - BRAZILIAN SHOE EXPORTS
As at June 2003
( US$ Millions )
Cumulative totals
	2003	2002	Variation	Year to date variation
				%
Jan	128	118	+9%	+8%
Feb	269	238	+19%	+13%
Mar	386	353	+27%	+9%
Apr	498	481	+34%	+4%
May	616	596	+43%	+3%
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