News from Brazil

Brazil Business & Economy News

In Brazil on January 6, 2012 at 1:04 pm

ECONOMY

Brazilians are now more optimistic than ever about the country’s economic situation, a survey by the Institute of Applied Economic Research (IPEA) said. The index measuring Brazilians’ optimism about the country’s current economic situation rose to a record-high 67.2 points in December from 63.7 points in November, the survey said, whereas it stood at 64.6 points in the same period in 2010 (Xinhua).

Economists trimmed forecasts for Brazil’s inflation rate for 2012 for a fifth week, after estimating that consumer prices last year topped the official target for the first time since 2003, a central bank weekly survey showed (Reuters).

Brazil will remain one of the fastest-growing nations in the coming years after overtaking the U.K. this year to become the world’s sixth-largest economy, the country’s Finance Minister Guido Mantega said (Bloomberg).

Brazil will overtake France to become the world’s fifth-largest economy in less than four years, the country’s Finance Minister Guido Mantega also said (Xinhua).

Unemployment fell to 5.2 percent last month, the agency said today. Economists expected an unemployment rate of 5.7 percent, according to the median estimate from 36 analysts surveyed by Bloomberg.

The Brazilian trade surplus in 2011 reached 29.79 billion U.S. dollars, an increase of 47.8 percent from the previous year, the Ministry of Development, Industry and Foreign Trade announced (Xinhua).

Brazil last year recorded the second-largest dollar inflow in its history, 65.2 billion dollars, up 168% from 2010, with most in the form of foreign investment, the Central Bank said (MercoPress).

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AUTOMOTIVE

Vehicle sales in Brazil totaled 3.63 million units in 2011, up 3.36 percent from 2010, the National Motor Vehicle Producers Federation (Fenabrave) said. It was the fifth consecutive annual record for vehicle sales, Fenabrave said. Sales of cars and light vehicles totaled 3.42 million units, up 2.9 percent from 2010, but fell short of Fenabrave’s expected increase of 5.9 percent (Xinhua).

The Brazilian subsidiary of automaker Ford has unveiled a new version of its EcoSport SUV and says it will be sold in close to 100 countries (Washington Post).

AVIATION

Brazil’s civil aviation authority, known as Anac, wants to alter by the second half of 2012 how take-off and landing rights are distributed among airlines to stimulate competition and lower ticket prices, Marcelo Guaranys, the agency’s president, said in an interview in Brasilia. The idea is to encourage new airlines to fly there and get airlines already there to improve service, he said (Bloomberg).

BANKING & FINANCE

Banco Bradesco pulled out of talks to buy HSBC Holdings Plc’s consumer finance unit Losango on concern about potential charges related to labor disputes (Reuters).

BTG Pactual, Brazil’s largest independent securities firm, agreed to pay up to 1.21 billion reais ($638.72 million) for all of Brazilian Finance & Real Estate, a firm specializing in property and real estate securitization (Reuters).

Brazilian investment bankers defecting to competitors won pay increases of as much as 25 percent in 2011 amid a shortage of experienced executives (Bloomberg).

Brazil’s top banks may tighten their grip on consumer and small-business lending as record high borrowing costs and the end of emergency credit pinch smaller competitors struggling with fallout from Europe’s debt crisis (Bloomberg).

The government will re-capitalize federally controlled Caixa Economica Federal with 450 million reais ($242 million) and the BNDES state development bank with 500 million reais (Bloomberg).

BIOFUELS

As the world’s second largest ethanol producer (after the U.S.), Brazil slipped into a rather enviable position when U.S. Congress dropped its ethanol import tariffs. According to industry experts, the long awaited move could see Brazilian ethanol exports increase by tenfold over the next decade, due to demand for Brazil’s sugarcane-based ethanol that Brazil claims is cheaper, cleaner and more efficient (The Rio Times).

“We’ve been waiting for this news for more than 30 years,” crows Marcos Jank, the president of UNICA, the Brazilian sugarcane-growers’ trade association. The cause of his excitement is the demise on December 31st of import tariffs and tax credits that have long sheltered ethanol distilled from corn in the United States from the same stuff made from sugarcane in Brazil. Now, for the first time, the two countries that produce more than 80% of the world’s ethanol can sell in each other’s backyard at market prices (The Economist).

But American farmers’ fears of being swamped by sugar-based tropical biofuel seem unfounded. With Brazil’s ethanol industry struggling to meet booming local demand, it’s U.S. producers instead who are shipping millions of gallons to the south. Three factors have converged to push Brazil’s ethanol distilleries to the limit. Sugarcane production fell this year for the first time in a decade, reducing supplies; global demand for sugar has remained strong; and domestic motor-fuel demand has surged, straining local gasoline and ethanol supply (Reuters).

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MINING & STEEL

The first of Vale’s giant dry bulk vessels to arrive in China has completed delivery of its iron ore cargo, shipping data showed, a key step forward in the Brazilian miner’s plan to cut shipping costs to its biggest market (Reuters).

OIL & GAS

The flow of oil from cracks in the seabed off the coast of Rio de Janeiro has long since slowed to a mere trickle. Not so the retribution against Chevron, an American oil company that was drilling in the Frade oilfield on November 7th when a sudden rise in pressure caused a leak. The exaggerated reaction to such a small oil spill is cause for alarm, not reassurance (The Economist).

A second major sub-salt oil development in Brazil passed a critical milestone when operator Petrobras and its partners declared the Guara field commercially viable (Reuters).

PORTS

Ports in Brazil are expecting to handle a billion tons of cargo for the first time in 2012, according to estimates by ANTAQ, Brazil’s National Agency for Waterway Transportation. If achieved, the figure will be 12.3 percent more than in 2011, with Rio de Janeiro State set to take the top spot from neighboring Espírito Santo (The Rio Times).

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