Brazil’s economic activity grows unexpectedly in February

April 15, 2015

Silvio Cascione – Reuters, 04/15/2015

Brazilian economic activity grew unexpectedly in February from the previous month, central bank data showed on Wednesday, but economists said the increase was too small to dispel forecasts for a recession this year in Latin America’s largest economy.

The Brazilian central bank’s IBC-Br economic activity index BRIBC=ECI, a gauge of farming, industry and services activity, rose a seasonally adjusted 0.36 percent from January, topping market expectations for a drop of 0.2 percent.

The index is seen as a leading indicator for gross domestic product data, which is released quarterly. Economists have forecast Brazil’s economy to shrink about 1 percent in 2015, which would be the country’s deepest recession in 25 years.

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Another huge and open iron mine is carved out of Brazil’s rain forest

April 14, 2015

Dom Phillips – The Washington Post, 04/13/2015

The line of trucks and four-wheel-drive pickups threw up clouds of red dust as it snaked up the hill on the wide dirt road. From the top, Brazilian rain forest stretched out into the distance. Before it, a vast quadrangle was being carved out of the slope by an army of machines, a scar of red earth in the green hills.

S11D, as this project is unceremoniously known, is an open-cast iron ore mine being dug out of this corner of the Brazilian Amazon, in the state of Para. Brazil’s mining giant, Vale, says the mine was designed for minimum environmental impact and maximum profitability. It is to start operating next year and by 2018 will be producing nearly 100 million tons annually of some of the purest iron ore in the world — a lifeblood for Brazil’s pallid economy.

But environmentalists argue that S11D could destroy rare savannah ecosystems found in two lakes on top of rich iron ore deposits. Dozens of caves that potentially contained evidence of ancient Amazon habitations have been lost. This grandiose $17 billion project is emblematic of a very contemporary, Brazilian dilemma: Can the country develop its rich natural resources without causing irreparable damage to its environment and history?

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Brazil’s Rousseff navigates troubles at home as she ponders a U.S. visit

April 6, 2015

Vinod Sreeharsha – McClatchyDC, 04/01/2015

Brazilian President Dilma Rousseff is expected to meet President Barack Obama next week when the Western Hemisphere’s leaders gather for the Summit of the Americas in Panama, in what will be Rousseff’s highest-profile encounter with Obama since revelations last year that the National Security Agency had spied on her.

Made public in the documents leaked by fugitive former NSA contractor Edward Snowden, the spying revelation led to the cancellation of a planned Rousseff visit to Washington, and she’s expected to respond next week to an invitation from the White House to reschedule the trip.

Yet tense relations with the Obama administration are nothing compared with what Rousseff faces at home: two years of virtually no economic growth, a currency that’s plunged 18 percent against the dollar just since Jan. 2, a major corruption scandal and loud calls for her resignation or impeachment. In just the third month of her second four-year term, her approval rating is 13 percent, according to the Brazilian pollster Datafolha, after she won 52 percent of the vote last fall.

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Fateful Harvest: Why Brazil has a big appetite for risky pesticides

April 6, 2015

Paulo Prada – Reuters, 04/02/2015

The farmers of Brazil have become the world’s top exporters of sugar, orange juice, coffee, beef, poultry and soybeans. They’ve also earned a more dubious distinction: In 2012, Brazil passed the United States as the largest buyer of pesticides.

This rapid growth has made Brazil an enticing market for pesticides banned or phased out in richer nations because of health or environmental risks.

At least four major pesticide makers – U.S.-based FMC Corp., Denmark’s Cheminova A/S, Helm AG of Germany and Swiss agribusiness giant Syngenta AG – sell products here that are no longer allowed in their domestic markets, a Reuters review of registered pesticides found.

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Putting Brazil’s political risk in perspective

March 13, 2015

Kenneth Rapoza – Forbes, 3/13/2015

The case for Brazil is not hard to make: diverse economy, rising incomes, cheap assets, high investment grade yield, and despite scandal a relatively stable government. But the noise is so deafening, and the recent data so awful, that it’s hard to make the case that Brazil has hit bottom. The bottom is coming, only not until next year.

For the contrarian investor, maybe you get ‘em while they’re hot?

Think about this for instance: the Brazilian real is trading near historic lows at R$3.20 on Friday’s opening in São Paulo. It is projected to stay there for another year, hovering between R$3.00 and R$3.15, according to Barclays Capital’s estimates. If you bought a local currency Brazilian bond, and held it for three years, you’d be getting 12.75% interest at least, and most likely a gain from the currency when the real strengthens again in a year or two.

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Brazil real seesaws in volatile session

March 10, 2015

Reuters, 3/10/2015

The Brazilian real moved 1 percent up and down in less than two hours of trading on Tuesday as a combination of global headwinds and domestic problems made the currency vulnerable to wild swings.

The real opened more than 1 percent lower and hit 3.1722 per dollar, its weakest in more than 10 years, before erasing losses to rise more than 1 percent to 3.097.

It last traded at 3.1244, 0.2 percent stronger than Monday’s close.

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Brazilian President’s approval rating drops

February 9, 2015

Rogerio Jelmayer – The Wall Street Journal, 2/8/2015

Brazilian President Dilma Rousseff ’s approval rating fell to a record low for her amid Brazil’s poor economic performance and corruption allegations involving the state-run energy company, poll results showed Sunday.

According to a survey by the Datafolha polling institute, 23% of respondents said the Rousseff administration was “excellent or good,” compared with 42% in a poll published in December. Ms. Rousseff’s approval rating reached the lowest level for a country’s president since 1999, when Fernando Henrique Cardoso was in the post.

The drop in Ms. Rousseff’s approval rating came as Brazil´s economy is failing to regain traction and state-run energy company Petróleo Brasileiro SA, or Petrobras, is in the middle of a corruption scandal.

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