News from Brazil

Brazil Weekly, April 18th

In Uncategorized on April 18, 2010 at 8:14 pm

POLITICS

Brazil is a country of paradoxes: President Lula embraces free trade, signs military agreements with Washington, is acclaimed as “Statesman of the Year” by the billionaires club at Davos in 2010 and has enriched bankers from Wall Street to the city of London; yet many western and a few Brazilian writers , Fidel Castro and other intellectuals and academics call him a “pragmatic leftist” or “progressive visionary”. Read about the “Two Brazils” in the Eurasia Review.

Brazil’s main opposition candidate, Jose Serra, gained voter support in the October presidential race, widening his lead over the ruling Workers’ Party’s Dilma Rousseff, an opinion poll showed on Saturday (Reuters).

But another poll suggests the two main candidates are in a statistical dead heat (Bloomberg).

FOREIGN AFFAIRS

Brazil, Russia, India and China matter individually. But does it make sense to treat the BRICs—or any other combination of emerging powers—as a block? Read the full article at The Economist.

The world’s leading emerging powers found little new to agree on in their summit in Brazil, but their assertive tone in demanding more clout in global financial institutions and setting of a deadline for the reforms shows they are slowly becoming a more potent group (Reuters).

China and Brazil bolstered their growing ties with trade and investment agreements before a summit of the world’s top four emerging markets that was cut back after China’s leader decided to return home to deal with a major earthquake (Reuters).

Brazil may create a fund to finance exports to Iran, even as the threat of more United Nations sanctions against the Islamic republic mounts, Trade Minister Miguel Jorge said (Bloomberg).

The United States and Brazil reached a provisional agreement last week regarding a long-standing dispute over American subsidies to domestic cotton farmers (The Rio Times).

At the conclusion of the fourth India Brazil South Africa Dialogue Forum (Ibsa) summit in Brasília on Thursday, the leaders of the three countries announced that they had agreed to set up a trilateral satellite programme.

DEFENCE

The U.S.-Brazil military accord, which was signed at the Pentagon by Jobim and U.S. Defense Secretary Robert Gates, is the first agreement of its kind in more than 30 years between the two countries. The U.S.-Brazil accord contains no provisions related to the use of Brazilian bases. It does promote military exchanges — such as naval ship visits — and cooperation on “the acquisition of defense products and services,” the Pentagon said (Reuters).

Read why Brazil signed a military agreement with the US in the Christian Science Monitor.

ECONOMY

Brazil is studying additional anti-inflationary measures such as tax breaks and lower import tariffs but monetary policy remains the main tool to control prices, Finance Ministry officials said (Reuters).

Brazil’s real, the best performing emerging-market currency in the past year, will surge more than 9 percent by the end of the year even as the central bank seeks to curb gains by purchasing dollars (Bloomberg).

Brazil’s economy will expand 5.5 percent a year in 2011 through 2013 as inflation stays within the central bank’s target of 4.5 percent, according to forecasts made as part of the country’s federal budget (Bloomberg).

BUSINESS

Brazilian investment bank BTG Pactual [BTG.UL] will invest in convertible debentures offered by local hospital and laboratory network Rede D’Or (Reuters).

Brazilian Embraer, the world’s third-largest aircraft manufacturer, is looking at producing small passenger jets in Russia, the head of Russia’s VEB bank, a potential partner in the project, told Reuters.

ArcelorMittal’s Brazil investments may include boosting iron ore capacity to 15 million tonnes by 2014/2015, ArcelorMittal Chief Executive Lakshmi Mittal said (Reuters).

Fresh Brazilian beef may be sold in U.S. grocery stores beginning next year for the first time in a decade if the two countries resolve a dispute over cotton, livestock analysts said (Reuters).

CSN, Brazil’s second largest producer of flat steel, will raise domestic prices by as much as 7.5 percent in the second quarter to counter a recent doubling of the cost of iron ore on international markets, Chief Executive Benjamin Steinbruch said (Reuters).

Brazilian construction company Mills Estruturas e Servicos de Engenharia and its shareholders raised 686 million reais ($392 million) in an initial public offering (Reuters).

Brazil’s largest retail group Pao de Acucar said it is in talks to change the terms of its agreed takeover of smaller rival Casas Bahia, which complained that the $2.3 billion deal was unfair (Reuters).

Bramont Montadora e Industrial de Veiculos SA, the seller of Mahindra cars and trucks in Brazil, may offer shares to the public for the first time next year as demand for vehicles in Latin America’s largest economy increases (Bloomberg).

Usiminas Chief Executive OfficerMarco Antonio Castello Branco plans to step down from the position in Brazil’s second largest steelmaker, two years after taking up the role (Bloomberg).

BANKING & FINANCE

Banco do Brasil, Brazil’s largest bank by assets, proposed to shareholders to sell 286 million new common shares as part of a plan to replenish the lender’s capital base (Reuters).

Brazil-based private equity and venture capital funds could raise up to $15 billion from investors by mid-2011, as a growing economy and increased risk taking fuel demand for investments (Reuters).

PORTS

Rotterdam is Brazil’s most important European port with in 2008 an annual throughput of 37.6 million tons of goods (+12% v. 2007, 33.5 mln). By far the most of the cargo is exported by Brazil: 36 (2006 31.7) million tons. The Netherlands rank four in the Brazilian export list, with a share of 5.2% in 2008, after the USA, Argentina and China but before Germany (Port of Rotterdam).

Arabica coffee producers in Brazil, the world’s largest producer and exporter, started harvesting a month earlier than expected after rains and hot weather led beans to mature earlier (Bloomberg).

OIL

Brazilian oil and gas startup OGX is considering selling minority stakes in some of its oil blocks (Reuters).

The Promar Ceará shipyard won the bid to build eight gas tankers under the Transpetro Fleet Modernization and Expansion Program (Promef). The shipyard, which had made the best proposal among competitors, completed its price negotiations with Transpetro. The vessels’ total cost will be $536 million. This order will generate more than 10,000 jobs in Ceará (Petrobras).

The first vessel built under Transpetro’s Fleet Modernization and Expansion Program (Promef) will set sail on May 03 from the Atlântico Sul Shipyard (EAS), in Pernambuco. The event will be attended president Luiz Inácio Lula da Silva. The Suezmax-type vessel is 274 meters long and capable of carrying a million barrels of oil (Petrobras).

Petrobras announces that its wholly-owned subsidiary Petrobras Internacional Braspetro (PIB BV)  has acquired from MEO Australia Ltd 50% of participating interest in the exploratory block WA-360-P, located in the Australian North Carnarvon basin, for the amount of US$ 39.0 million.

INFRASTRUCTURE

A Brazilian court ruled the government will be able to hold an auction next week for the massive Belo Monte dam in the Amazon region, overturning a previous ruling that blocked the tender on environmental grounds (Reuters).

AMAZON

A Brazilian rancher accused of ordering the killing of a U.S.-born nun over an Amazon forest land dispute was sentenced to 30 years in prison, a decision hailed by activists as a rare legal triumph in a typically lawless region (Wall Street Journal).

RIO

Guarded by the Morro de Leme (Mountain of Leme) to the north and surrounded by tropical hills, three favelas and the ocean, the variety of Copacabana’s surroundings have made it a legendary part of Rio’s urban makeup. It is a thriving commercial and residential neighborhood located on a huge, stunning beach which has earned it worldwide fame and a history as colorful as the sights that envelop it. Read the assessment of the area at The Rio Times.

Governor Cabral has decided to allocate R$ 1,26 billion to sanitation, R$ 0,95 billion to urban rail transportation, R$ 300 million to investments in public security, R$ 600 million to secondary roads (see attached release in Portuguese for details). In addition, the Governor will allocate R$ 1 billion to a new housing strategy, the urgency of which was clearly demonstrated by the consequence of recent floods. The remainder will be applied in the strengthening of the public administration (R$ 120 million), environment protection (R$ 250 million) and the reform of Maracana required by the International Soccer Federation–FIFA (R$ 400 million). This investment will reinforce, complement and be part of the preparation for and the legacy of the 2016 Summer Olympic Games to be held in the city of Rio de Janeiro (Brazil Weekly).

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