Leslie Josephs – The Australian Business Review, 11/13/2014
The sugar market gave investors a buzz yesterday, when news of a surprisingly sharp decline in Brazilian production sent prices to their biggest percentage gain in more than six weeks.
The report, by a Brazilian trade group, rattled investors who had made large bets that sugar prices would decline amid a global glut. Those bets largely hinge on a bumper Brazilian harvest flooding the market with supply. The country produces about a fifth of the world’s sugar.
Brazil’s main sugar growing region experienced its worst drought in decades earlier this year, hurting the development of sugar cane, and dozens of mills closed for the year because of poor weather and low prices, reducing Brazil’s output. But yesterday’s report was even weaker than expected.
Brianna Lee – International Business Times, 10/13/2014
A deepening drought crisis across Brazil is hitting two of the country’s largest exports as coffee prices surged to their highest level in two years and sugar production is headed for a steep decline. The drought affecting Brazil this year is the worst the country has faced in decades, triggering alarm for cities like Sao Paulo, which has instituted emergency measures to cope with a water supply crisis.
The price of Arabica coffee, of which Brazil is the world’s top supplier, soared to a two-year high last week as meteorologists predicted low prospects for rainfall in Brazil’s coffee-producing regions for the rest of October and November.
Brazil joins other Central American countries dealing with coffee crop woes as El Salvador, Honduras, Panama and Guatemala have all dealt not only with drought but also coffee rust, a fungus that hit crops and resulted in the loss of more than $1 billion since 2011. Meanwhile, however, Colombian coffee seems to be taking advantage of the situation. Colombia’s coffee output looks set to reach a 20-year high this year.
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.”
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.
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.
Anthony Boadle and Paul Simao – Reuters, 08/30/2014
Environmentalist Marina Silva unveiled her campaign platform for Brazil’s Oct. 5 presidential election on Friday, boosted by government data that showed the economy had fallen into a recession in the first half of this year.
Following are her main policy proposals aimed at restoring business confidence and investment in Brazil and putting the country on a path to sustainable growth:
ECONOMY: Return to the basic tripod of policies that gave Brazil financial stability a decade and a half ago: fiscal discipline, inflation targeting and a floating exchange rate, ending central bank intervention that has overvalued the real currency.
Brazil’s trade surplus shrank to $760 million in May, down 74 percent from a year ago and the smallest surplus for that month in 11 years, Trade Ministry data showed on Monday.
The result was far below market expectations of a $1.8 billion surplus, according to the median forecast of 16 analysts surveyed by Reuters.
A fall in the prices of key commodities such as soy and crude oil have hampered Brazilian exports while the country’s imports are booming.