Brazil’s credit-driven consumer boom hits a limit

Howard Schneider – The Washington Post, 12/13/2012

By early November, the retailers along bustling Doze Outubro street were in full holiday mode. Balloons and streamers bedecked a newly opened branch of the Magazine Luiza department store, a deep-voiced salesman boomed offers of easy credit through a sidewalk sound system, and store banners summed up the mood of a consumption-crazy nation:

“Come, and be happy.”

For more than a decade, a credit-driven consumption boom has helped fuel economic growth here, expanding the country’s middle class and adding to the success Brazil had already enjoyed through its commodity and agricultural sales. Now, there are signs that that model is fraying, and with it the optimism that the world’s main emerging markets would become permanent props for global economic growth.

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Brazil’s trade surplus more than doubles in July from over a year ago

Mercopress, 08/02/2011

According to the Trade Ministry’s website the Brazilian surplus widened to 3.1 billion dollars in July from 1.3 billion a year ago. However the surplus slipped from June’s 4.4 billion in June.

Exports in July rose to 22.3 billion from 17.7 billion a year ago, while imports increased to 19.1 billion from 16.3 billion dollars, the Trade Ministry said

The Brazilian government slapped a 1% tax on currency futures last week as it seeks to contain the appreciation of the Super Real to protect local manufacturers from foreign competition. Higher commodity prices this year offset gains in the currency, helping increase the 12-month trade balance to 27.1 billion, from 17.7 billion a year ago.

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Official says China to invest $9B in Brazil

Associated Press/Forbes, 07/05/2011

A top Brazilian trade official says China will invest at least $9 billion in the South American nation this year. Half of it will be in the technology sector.

Alessandro Teixeira is the No. 2 official at Brazil’s Trade Ministry.

He is visiting China and told reporters there that the Asian economic giant will be investing more in Brazil’s technology sector, rather than just commodities.

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Brazil backs South American alliance for farm exports

Matt Craze – Bloomberg Businessweek, 10/22/2010

Brazil is seeking a partnership with Argentina and other South American producers of grains and oilseeds to deal jointly with buyers in Asia and elsewhere, according to Brazilian Agriculture Minister Wagner Rossi.

Rossi met his Argentine counterpart Julian Dominguez and ministers from Chile, Paraguay and Uruguay in Santiago yesterday. Brazil is seeking to draw up “consistent” policies with its neighbors, Rossi said in an interview in Santiago.

A deal between Argentina, Brazil and Paraguay would combine about half of the world’s soybean production, according to U.S. Department of Agriculture data. Argentina and Brazil are also among the world’s top three corn exporters, according to the USDA. China is the world’s largest soybean importer.

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Brazil’s Bovespa index advances for third day, led by homebuilders, banks

Alexander Cuadros – Bloomberg, 10/13/2010

The Bovespa stock index rose for a third day as homebuilders and banks rallied and investors speculated economic growth is accelerating in China, Brazil’s biggest trade partner.

Vale SA, the world’s largest iron-ore producer, climbed after China’s imports of the mineral rebounded to a five-month high. PDG Realty SA Empreendimentos & Participacoes reached a record, leading a rally in homebuilders after Goldman Sachs Group Inc. recommended adding to holdings of the stock. Banco Santander Brasil SA also rose to the highest level since its initial public offering, leading gains in financial stocks.

The Bovespa gained 1 percent to 71,646.42 at 10:38 a.m. New York time. Forty-six stocks rose on the index while 18 fell. The real strengthened 0.8 percent to 1.6570 per dollar.

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World economy: The China cycle

Geoff Dyer – Financial Times, 09/12/2010

Deep in the Amazon jungle, huge chunks of red earth are torn out of the ground at Carajás, the biggest iron ore mine in the world, to be transported halfway round the globe to the steel mills on China’s eastern seaboard. There they are turned into the backbone for millions of tower blocks in hundreds of booming Chinese cities.

Last year, China overtook the US to become Brazil’s biggest trading partner. The two large developing countries may be on opposite sides of the planet but their growing economic ties over the past decade have become among the enduring symbols of shifts in the global economy.

The duo could also be forging a path for one of the potential biggest realignments in the global economy over the next decade. With little fanfare, China is likely to emerge as the biggest direct investor in Brazil this year, following a string of deals announced in mining, steel, construction equipment and electricity transmission.

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Ending the commodities ‘curse’

Augusto de la Torre – The Miami Herald, 09/13/2010

In 1672, Potosí, Bolivia, was one of the largest and richest cities in the world. Located at the base of Cerro Rico, Potosí was a hotbed of Spanish silver mining, the operations of which were so prolific, a potosí became synonymous for great riches.

Three hundred forty years later, Potosí is poor and rife with conflict. Just last month miners barricaded all routes out of the city, trapping more than 100 foreign tourists for 20 days. It’s hardly a surprise that the Bolivian press calls mining the burden of Potosí.

Latin American history is littered with tales of commodity booms gone bust like Potosí’s. That the quick riches never seem to produce lasting wealth has led some to conclude that the region, like other resource-rich regions, is under a “natural resource curse.”

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Ties with China based on commodity exports, manufactured imports

Daniela Estrada – InterPress Service, 09/03/2010

Exports from Latin America and the Caribbean will grow again this year, driven largely by demand from China. But the high proportion of commodities may increase dependency on China, and Asia as a region, warns a new report by ECLAC, the regional United Nations agency.

“Clearly, trade relations between the region and China could give rise to centre-periphery dynamics. We supply it with raw materials, with little added value, and it sends back manufactured goods,” Claudia Casal, a researcher at the non-governmental National Centre for Alternative Development Studies (CENDA) in Chile, told IPS.

Casal was one of the authors of the study “Las relaciones económicas y geopolíticas entre China y América Latina. ¿Alianza estratégica o interdependencia asimétrica?” (Economic and geopolitical relations between China and Latin America: Strategic alliance or asymmetric interdependence?), published in 2009 by the Latin American Network of Research on Multinational Corporations (RedLat), which is made up of labour research institutions and trade unions in seven countries in the region.

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Leading Brazilian enterpreneur Eike Batista on Charlie Rose

Brazilian businessman Eike Batista on Charlie Rose on PBS, Feb. 8, 2010.

In a wide-ranging interview with Charlie Rose aired Feb. 8 on PBS, Eike Batista, president and CEO of EBX, talked about Brazil’s booming oil business. He also presented his views on the reasons behind Brazil’s current success and discussed politics in South America, as well as major trends in international economy.

Last year, Batista was co-chairman, along with ExxonMobil’s Rex Tillerson, of a dinner held at the Waldorf Astoria in New York in honor of President Luiz Inacio Lula da Silva. At the occasion, President Lula was presented with the Woodrow Wilson Award for Public Service. The ceremony was hosted by the Brazil Institute of the Wilson Center.

To watch the interview, visit http://www.charlierose.com/guest/view/6827 or to read the full transcript, click here.

Batista was born in November 1956  in the state of Minas Gerais.  He lived part of his childhood in England. In his early teens, Batista moved to Geneva, Düsseldorf and Brussels with his family. His father, Eliezer Batista, built CVRD and is a legend in Brazil. In 1974, Batista  entered the Metallurgical Engineering course at the University of Aachen. While still a student, he sold door-to-door insurance policies to earn his own living.

After graduating, he returned to Brazil in the eighties and went into business in the diamond and gold sector. A speaker of five languages – Portuguese, German, English, French and Spanish – he worked as an intermediary between producers in Amazonia and buyers in the large centers in Brazil in Europe. During the same decade, he set up the first mechanized alluvial gold plant in Amazonia and became the top executive of Canadian company TVX Gold – a company that is listed on the Canadian stock market and which led to the start of his relation with the global capital markets. The nineties were marked by the diversification of business interests and the move into other continents.

From 2000 onwards, Batista  focused his attention on Brazil’s demand for natural resources and infrastructure. Between 2004 and 2008, he set up, structured and opened the capital of corporations MMX (mining), MPX (energy), OGX (oil) and LLX (logistics), raising the record amount of US$ 7.1 billion from both Brazilian and foreign investors.

Batista chairs the EBX Investimentos and the council of each of the four publicly traded company in the group. In parallel to these activities, the group has projects in other areas, such as real estate, entertainment and social, and search new opportunities to generate wealth and value for its shareholders, society and country. Capacity of creation, implementation and development of new projects of ventures are the trademarks of the actions of the EBX Group, based in Rio.