Datafolha indicates a draw in the second round between Dilma and Aécio

July 18, 2014

Brasil Post – 7/17/2014

Candidate for reelection in the race for the Planalto Palace, President Dilma Rousseff (PT) fluctuated two percentage points lower in the last study by Instituto Datafolha, revealed this Thursday (17), and she emerges now with 36% of intended votes. Second place in the first round simulation of the presidential elections, Aécio Neves (PSDB) remains with 20%, the same percentage obtained in the last study. Eduardo Campos (PSB), in turn, fluctuated from 9% to 8%.

For the first time, however, a technical draw was registered in a second round simulation. In a possible draw between Dilma Rousseff and Aécio Neves, the current president of the Republic would have 44% of the votes, compared to 40% for the Minas Gerais senator – there is a margin of error of two percentage points more or less. Yet with a possible second round against Eduardo Campos, Dilma would win 45% to 38%.

Based on Datafolha’s research, however, it is not possible to say if there would or would not be a second round if the race were today. Even though the rivals of Dilma, together, amounted to 36%, the same percentage as the PT candidate, the margin of error leaves open the possibility or not of the presidential election between at least two candidates. Read the rest of this entry »


Brazil farmers say GMO corn no longer resistant to pests

July 29, 2014

Caroline Stauffer – Reuters, 7/28/2014

Genetically modified corn seeds are no longer protecting Brazilian farmers from voracious tropical bugs, increasing costs as producers turn to pesticides, a farm group said on Monday.

Producers want four major manufacturers of so-called BT corn seeds to reimburse them for the cost of spraying up to three coats of pesticides this year, said Ricardo Tomczyk, president of Aprosoja farm lobby in Mato Grosso state.

“The caterpillars should die if they eat the corn, but since they didn’t die this year producers had to spend on average 120 reais ($54) per hectare … at a time that corn prices are terrible,” he said.

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Central Bank of Brazil lowers bank reserve requirements in bid to boost liquidity

July 29, 2014

Arvid Ahlund – Central Banking, 7/28/2014

The Central Bank of Brazil (CBB) has lowered reserve requirements for banks in a move to inject 45 billion reais ($20 billion) into the country’s stagnating economy ahead of presidential elections later this year.

The CBB, which raised interest rates by 375 basis points to 11% in the year to April to fight above-target inflation, said on Friday the new measure “aimed at improving the distribution of liquidity in the economy” following a “recent moderation in credit” and a “decrease in the level of risk in the financial system”.

The change effectively allows banks to use as much 50% of the reserves it holds against deposits on new loans or the acquisition of loan portfolios, potentially translating into 30 billion reais ($13.4 billion) in additional credit creation.

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Appalachian’s Energy Center will help improve life for Brazil’s catadores

July 29, 2014

ASU News, 7/28/2014

A community-based landfill gas project in Brazil piloted in 2009 by the Appalachian Energy Center located at Appalachian State University will soon become reality.

The Green Methane Committee in Fortaleza/Maracanaú, Brazil, which the Appalachian Energy Center helped form and train, will receive approximately $750,000 from the Brazilian Ministry of the Environment – National Fund on Climate Change to construct a system to collect and utilize methane gas from the Maracanaú Landfill. The Appalachian Energy Center also helped plan this landfill gas collection and utilization system.

The gas will be used at an Energy Park that will be constructed adjacent to the landfill where catadores (Brazilian waste pickers) will gather plastic and glass recyclables from the waste stream before they end up in the landfill, providing more profit for these workers.

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Though not a ‘diplomatic dwarf,’ Brazil lacks clout

July 29, 2014

Ben Tavener – Al Jazeera America, 7/29/2014

Brazil woke from a foreign policy slumber last week and waded into the world’s most complex geopolitical conflict.

As the number of civilian deaths in Gaza continued to climb to disturbing levels, Brazil’s Foreign Ministry issued a short statement saying it considered the “escalation of violence” between Israel and Palestine “unacceptable” and “strongly condemned the disproportionate use of force by Israel in the Gaza Strip.”

Brazil said it would recall its ambassador in Israel for consultation — an act of protest in diplomatic terms — which effectively fractured ties with Israel. The Palestinians praised Brazil for the strong diplomatic gesture, but Israel’s Foreign Ministry said, “Such steps do not contribute to promote calm and stability in the region,” provide a “tailwind to terrorism” and affect “Brazil’s capacity to wield influence.”

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Brazil: When To Sell After The Rally?

July 29, 2014

Shuli Ren – Barron’s, 7/29/2014

Brazil’s equity market has had a stunning performance since mid-March. The iShares MSCI Brazil Capped ETF (EWZ) has gained around 30% since then. This ETF is up 16.7% this year.

Part of the rally is propelled by optimism in the state-owned sector. Investors bet that high-profile names such as Petrobras (PBR) and Electrobras (EBR) will operate better once a new government is ushered in after the October presidential elections. Last week, Barclays upgraded Petrobras to Buy for this precise reason. Petrobras outpaced the Brazil ETF, gaining 27.2% this year. Electrobras rose 17%. State-owned Banco de Brasil (BBAS3.Brazil) advanced 24%. Brazilian iron ore producer Vale (VALE), whose fate is tied to China, is the only high-profile underperformer, not even breaking even this year.

But some investors are skeptical of the Brazilian rally, asking “when to sell” Brazil. In a report published today, strategist Geoff Dennis suggested the time is “now.”

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Brazil’s Real Falls as Ukraine Turmoil Saps Emerging-Market Bid

July 29, 2014

Paula Sambo and Filipe Pacheco – Bloomberg Businessweek, 7/29/2014

Brazil’s real dropped the most among major Latin American currencies as turmoil in Ukraine dried up demand for emerging-market assets.

The real declined 0.2 percent to 2.2279 per U.S. dollar at 9:42 a.m. in Sao Paulo. Swap rates, a gauge of expectations for interest-rate moves, increased six basis points, or 0.06 percentage point, to 11.33 percent on the contract maturing in January 2017.

Investors sought refuge in the dollar as the European Union and the U.S. prepared new sanctions against Russia while President Vladimir Putin’s administration formulated its response to international pressure over the conflict in Ukraine.

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Brazil Sugar Production Up, but Don’t Expect It to Last

July 29, 2014

Alexandra Wexler – The Wall Street Journal, 7/24/2014

Sugar-industry executives and analysts are calling for the biggest decline in Brazil’s sugar output over a decade. But the numbers coming in from the harvest are showing that the world’s No. 1 producer is churning out sugar well ahead of last year’s pace. What gives?

The apparent paradox can be explained by dry weather in Brazil, where the top-growing regions experienced the worst drought in decades from January through April. Ongoing dry conditions are making it easier for growers to harvest cane, inflating the early harvest totals. The blistering pace of the harvest means that mills are likely to run out of sugar cane to crush far sooner than is typical.

That means Brazil’s sugar harvest will be short, and likely sweet for prices.

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