U.S. Reaches Deal With Brazil Ending Cotton Dispute

October 1, 2014

Alan Bjerga – Bloomberg News, 09/30/2014

The U.S. and Brazil reached a $300 million agreement to resolve a dispute over cotton subsidies that has bedeviled the two nations for more than a decade.

The accord signed today in Washington involves a one-time U.S. payment to the Brazil Cotton Institute in return for that nation dropping all claims against the U.S., the U.S. Trade Representative said in a statement. Brazil will also not pursue any new World Trade Organization cotton claims while a five-year farm bill Congress passed in February is in effect.

“Today’s agreement brings to a close a matter which put hundreds of millions of dollars in U.S. exports at risk,” U.S. Trade Representative Michael Froman said in a statement with Agriculture Secretary Tom Vilsack. “The United States and Brazil look forward to building on this significant progress in our bilateral economic relationship.”

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Brazil begins dairy exports to Russia

September 24, 2014

Russia Today, 9/24/2014

Three so-far-unnamed Brazilian dairy companies have received the proper paperwork to start deliveries to Russia, a representative of the Brazilian Ministry of Agriculture said. The new imports will help fill a gaping hole left by EU suppliers.

One of the companies has already started deliveries, Marcelo Junqueira, secretary for international affairs of the Brazilian Agriculture Ministry Marcelo said, ITAR-TASS reported.

The new deliveries will help fill the 57 percent gap of imported dairy products after Russia introduced a one-year food embargo in August on certain agricultural products from the EU, US, Australia, Canada, Australia and Norway.

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Brazil needs to keep pace with rise of “China 2.0″

September 9, 2014

Ji Ye (Xinhua) – English.people.cn, 09/09/2014

Brazil needs to develop a strategic vision in order to cooperate with China in a new era, said Marcos Troyjo, a Brazilian economist and co-director of the BRICLab at Columbia University, in a recent exclusive interview with Xinhua.

According to Troyjo, the way China’s economy progressed over past 30 years following thecountry’s reform and opening-up policies is called “China 1.0.”

During that period of time, China took advantage of public-private partnership, cheap workforce and a favorable approach to foreign capital to become the largest manufacturing park in the world. According to Troyjo, China has now entered a new stage, which he calls “China 2.0,” and itshould no longer rely on governmental investment and foreign trade to simulate its economic development.

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Brazil’s Real Tumbles on Concern Rousseff Is Picking Up Support

September 9, 2014

Paula Sambo – Bloomberg, 09/08/2014

Brazil’s real declined the most in emerging markets on speculation voter polls will show increased support for President Dilma Rousseff as she seeks re-election amid a recession and above-target inflation

The real fell 1.1 percent to 2.2675 per U.S. dollar at the close of trade in Sao Paulo, the biggest drop among 24 developing-nation currencies tracked by Bloomberg. Swap rates increased 21 basis points, or 0.21 percentage point, to 11.23 percent on the contract due in January 2020.

The same tracking polls that correctly predicted growing support for opposition candidate Marina Silva are now showing a slight decline in her support, according to a report today by newspaper Folha de Sao Paulo. A new poll by CNT/MDA may be released tomorrow and three others could be released this week. Speculation that Rousseff will lose her bid for re-election amid a faltering economy has helped to push the real up 4.2 percent in 2014, the most inemerging markets.

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Brazil’s vote could change region’s political map

September 4, 2014

Andres Oppenheimer – Miami Herald, 09/03/2014

New polls showing that opposition candidate Marina Silva is likely to win Brazil’s upcoming presidential elections are leading growing numbers of analysts to predict that Latin America’s biggest country may soon shift toward more business-friendly policies, and rock the whole region’s political scene.

Silva, an environmentalist who was born in poverty, comes from a mixed-race family and is often referred to as “Brazil’s Obama,” is tied with left-of-center President Dilma Rousseff in the the polls for the first-round vote on Oct. 5, and would defeat Rousseff by 10 percentage points in a likely second-round vote scheduled for Oct. 26, according to the latest Datafolha poll.

If current voter preference trends continue and Silva wins, it would mark the end of a 12-year hold on power by the leftist Workers’ Party. During that period, Brazil has played a key role in supporting Venezuela and other leftist populist governments in the region.

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Brazil Coffee Output Set for Longest Decline Since 1965

August 28, 2014

Marvin G. Perez and Morgane Lapeyre – Bloomberg, 8/28/2014

A prolonged drought in Brazil has already claimed about half of Jose Francisco Pereira’s coffee crop. Next year could be even worse as the country heads for the first three-year output decline since 1965.

“Everybody is praying for rain,” said Pereira, general director of Monte Alegre Coffees, a grower with 2,500 hectares (6,280 acres) based in Alfenas, Minas Gerais, that forecast this season’s harvest at 45,000 bags, down from 82,000 last year.

Production in Brazil, the world’s top grower, may drop as much as 18 percent to 40.1 million bags when the harvest ends next month, the National Coffee Council estimates, after a 3.1 percent slide last year. With damage worsening before the start of spring in the Southern Hemisphere, the council said farmers may collect less than 40 million bags in 2015, creating the longest slump in five decades.

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‘Made In Brazil’ Under Pressure, Study Shows

August 20, 2014

Kenneth Rapoza – Forbes, 8/19/2014

Brazil is more than samba and soccer. But the airplanes it makes and the soybeans it grows are coming under increasing cost pressures, making a number of manufacturers there lose ground to competitors in the U.S.

A new study by the Boston Consulting Group (BCG), made public on Tuesday, said that Brazil was one of a handful of 25 major exporters that was losing its competitive edge to other countries in the Americas.  In this case, the U.S. and Mexico are often beating Brazil to the punch.

“Improving the productivity of each worker is becoming an increasingly important factor in manufacturing competitiveness across the globe,” said Michael Zinser, a BCG partner. “This is especially true as the once-considerable wage gaps between developed and developing economies continue to shrink.”

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