Brazil has just registered its worst month ever, in terms of trade. Imports outweighed exports by $4.06bn in January, despite a weaker real that should, in theory, be giving a boost to exports. But how bad is it really? Beyondbrics had a quick dig into the numbers.
As occurred in the 11 previous months, the Trade Confidence Index (TCOI) by the Getulio Vargas Foundation started 2014 below the level recorded in the same period of the previous year. Compared to the last few months, however, the result of January 2014 can be considered favorable: the average index for the quarter ended January was only 1.6% below the same period of the last year, the best result since February last year (-0.9%) on the same basis of comparison. In December 2013, the quarterly interannual variation of the index had been -3.0%.
A failure in the electric grid interrupted part of the energy transmission between the North and South East of Brazil February 4th, causing supply shortages in several cities across four of the country´s regions. The power cut affected over 2 million consumer units. The regions of São Paulo, Rio de Janeiro (South East), Parana (North East) as well as Santa Catarina, Rio Grande do Sul (South), Mato Grosso (Centre West) and Tocantins (North) were all affected. There were also unconfirmed reports in Goias and Espirito Santo (Folha).
Brazil’s latest economic data point to slower growth, Forbes reports.
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Brazil’s stalled port terminal auctions will weather legal challenges this year and draw about $7 billion in private investment to ease the flow of record grain exports through clogged docks, the country’s ports minister told Reuters. Objections from the federal audit court, or TCU, delayed President Dilma Rousseff’s plan to start leasing public port terminals to private companies last year and some operators threaten additional lawsuits over existing concessions.
A drop in natural gas prices caused by a shale gas boom in the United States is hurting Brazilian petrochemical company profits by reducing pricing power and making them less competitive, the head of the construction and industrial conglomerate Grupo Odebrecht SA said (Reuters).
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Troubles across the Brazilian sugar sector are coming to a head, with investors keeping a nervous eye on troubled credit Aralco – which has been living from coupon payment to coupon payment, and has another coming due in May (Reuters).
Domestic air travel by Brazilian airline companies increased 7.9 percent in December from the same period last year, according to ANAC, the National Agency of Civil Aviation in Brasilia. Air travel is measured in total kilometers of air travel purchased by customers (Bloomberg).
Brazil’s $3 billion plan to build remote airports to handle freight seeks to end dependence on cargo shipments along the Amazon River and potholed roads that contribute to transport costs twice the U.S. average. Auctions will start as soon as April for the rights to operate 270 regional airports to boost air traffic for passengers and cargo, Aviation Minister Wellington Moreira Franco said. Brazil also may offer subsidies to construct airports and for airlines to add regional routes, providing a “big stimulus” for planemaker Embraer, he said (Bloomberg).
BANKING & FINANCE
Itaú Unibanco, Banco do Brasil and Spain’s Santander await judgment by the supreme court over actions a quarter of a century ago. Depositors claim the trio’s subsidiaries took advantage of government efforts to quash hyperinflation to fleece owners of inflation-linked accounts. If the justices side with depositors, other lenders that offered similar instruments may also be on the hook. The bill could reach 150 billion reais ($62 billion), according to the central bank (The Economist).
MINING & STEEL
Vale approved and will submit to the Board of Directors a proposal for the distribution of a minimum dividend of US$ 4.2 billion in 2014, equivalent to US$ 0.814999890 per share for both common and preferred shares outstanding, to be distributed in two installments, on April 30 and October 31, 2014.
OIL & GAS
Petrobras has announced that its total oil and natural gas production in Brazil, in December of 2013, was 2.362 million barrels of oil equivalent per day (boed), up 0.8% on the 2.342 million boed extracted in November. Oil production averaged 1.964 million barrels per day (bpd), up 0.4% on November’s production of 1.957 million bpd. Including the production managed by Petrobras for its partners in Brazil, total volume in December was 2.493 million boed and oil output was 2.043 million bpd.
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