News from Brazil

Brazil Business & Economy News

In Brazil on July 15, 2011 at 10:10 am


While many have claimed there is a credit bubble in Brazil, evidence actually suggests that irrational exuberance has come to define labor markets in the South American member of the BRIC countries.  Analysts at Nomura have identified trends showing falling unemployment and rising wages while productivity falls and output lags, suggesting a correction could be looming (Forbes).

Brazil’s two biggest cities, Rio de Janeiro and Sao Paulo, are among the highest climbers in a list of the world’s most expensive cities to live in, as the nation’s economic growth continues to outpace Europe and the U.S. According to the survey, Sao Paulo jumped to 10th place in the list of 214 cities, from 21st last year, while Rio de Janeiro surged to 12th from 29th (Bloomberg).


Brazil says it will invest $10 billion to help family farms in Latin America’s biggest country. The investment will help small farmers working on land received from Brazil’s agrarian reform program, indigenous communities and communities of descendants of runaway slaves that started being formed in the 17th century (Forbes).

The Brazilian Sugarcane Industry Association (UNICA), together with the Center for Sugarcane Technology (CTC) and other associations in the South-Central region of Brazil, completed a review of their estimate for the 2011/2012 sugarcane harvest. The revised forecast points to a total cane crush of 533.50 million tons, a 6.16% decrease over the original estimate announced in March of 2011 (568.50 million tons), and a 4.21% drop compared to the total amount of cane harvested at the end of the 2010/2011 season (556.94 million tons) (Unica).


A twin-engine aircraft has crashed in north-east Brazil, killing all 16 people on board. The crew had reported problems almost immediately after take-off from the city of Recife, officials said (BBC).

Embraer delivered 25 commercial and 23 executive jets in the second quarter of 2011 (2Q11), closing out the first six months of the year with 45 commercial jets and 31 executive jets delivered. On June 30, 2011, the firm order backlog totaled USD 15.8 billion (Embraer).


The auction to build a major high-speed rail link between Brazil’s two main cities, Sao Paulo and Rio, has failed to attract any bidders. The rail link is a key infrastructure project for President Dilma Rousseff’s government, made even more important with Rio set to host the 2016 Olympics (BBC).

Brazil’s planned bullet train linking the cities of Rio de Janeiro, Sao Paulo and Campinas may be now operated by the state-controlled company ETAV, O Estado de S.Paulo newspaper reported (Bloomberg).


Brazilian retail tycoon Abilio Diniz has suspended plans to merge his supermarket chain Grupo Pao de Acucar with the local arm of France’s Carrefour. His move comes after Brazilian state development bank BNDES backed out of supporting the deal (BBC).

Brasil Foods, Brazil’s biggest maker of TV dinners and frozen meat products, won conditional approval of its 3.8 billion US dollars takeover of rival Sadia SA as Brazilian regulators ordered it to stop using a top brand and sell some assets to ensure domestic competition (MercoPress).

Brazilian antitrust regulators could suspend Gol Linhas Aereas’ purchase of rival airline Webjet, citing potential harm to competition in the industry, local newspaper Valor Economico said (Reuters).


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Brazil’s state-run oil giant Petrobras demanded an indemnification worth over 160 million U.S. dollars from Ecuador after the termination of an exploration contract between the two countries, an Ecuadorian official said (Xinhua).

SBM Offshore N.V., based in the Port of Rotterdam area, announced that contracts for the twenty year charter and operation of FPSO Cidade de Paraty for the Lula Nordeste development in the pre-salt area, offshore Brazil, have been executed with BM-S-11 Consortium (65% Petrobras SA – Operator, 25% BG Group (BG E&P Brasil Ltda) and 10% GALP Energia (Petrogal Brasil Ltda) (World Maritime News).


The Taiwanese technology group Foxconn has announced that it will start producing iPads in Brazil by November this year. It already has five production facilities in Brazil, and has said it will invest R$12 billion in the production of computer displays in the country over the next five years (The Rio Times).


Vale announces that it has signed an agreement to form a joint venture with its subsidiary Vale Fertilizantes S.A. to exploit the concession of the maritime terminal, Terminal Ultrafertil (TUF), located near Santos, in the coastal area of the state of São Paulo. The maritime terminal handles imported cargo such as sulfur, ammonia and fertilizers in general, being strategically linked to Vale’s railway system (Vale).

Work in progress on Eike Batista’s Sudeste Port, south of Rio de Janeiro. More here.

Embraport received a visit from João Paulo Tavares Papa, the Santos Mayor. The Embraport Terminal is the first for Santos’ continental area and will generate 1,100 job opportunities during its operation, scheduled to begin in 2013. Currently, 772 people already work on the project, 90% of whom are residents from the region (Odebrecht).


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