Basic Political Developments s24

Brazil

Basic Political Developments

· Brazil announced May 1 that it will change its ambassador to Peru; the outgoing minister had clashed with Peru’s newly elected president.

· Brazil is negotiating with Russia to establish aircraft manufacturing plants in the South American country, according to May 1 reports.

National Economic Trends

· Brazil received an investment-grade credit rating for the first time from Standard & Poor's May 1; S&P increased Brazil’s rating to a BBB-minus from a BB-plus.

Business, Energy or Environmental regulations or discussions

· A trade delegation from US state Georgia is departing next week for Brazil to continue expanding business ties between South America's largest country and the state, according to May 1 reports.

· Kazakh mining group ENRC paid $300 million for a 50 percent stake in a Brazilian firm developing an iron ore deposit, ENRC said May 1.

Activity in the Oil and Gas sector (including regulatory)

Petrobras

· Brazilian state oil company Petroleo Brasileiro announced April 30 that it will increase the prices of domestic gasoline and diesel due to soaring global oil prices. The increase will begin May 2 and will include price hikes of 10 percent for gasoline and 15 percent for diesel fuel. Brazil has not seen fuel prices rise since September 2005. The government said it would compensate for the price increase by reducing fuel taxes. Brazil's ethanol industry expressed discontent over the tax cut, saying it damages the sector's hopes to improve its price margins relative to traditional fuels. Ethanol prices in Brazil stay at or below 70 percent of the price of gasoline, and would have risen if the fuel price increase had not been offset.

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Basic Political Developments

http://www.ultimahora.com/notas/112593-Brasil-cambiar%C3%A1-a-su-embajador-en-Paraguay

Brasil cambiará a su embajador en Paraguay

08:00 | El actual representante de Itamaraty tuvo un altercado con Fernando Lugo a causa de la protesta del entonces presidenciable por las condiciones del contrato de Itaipú, totalmente desfavorables para el Paraguay.

Jueves|01|MAYO|2008

La República Federativa del Brasil cambiará a su embajador en el Paraguay, según una publicación del último número de la revista Veja que informa del reemplazo de Valter Pecly, quien ahora pasaría a ser el representante brasileño ante el Reino Unido.

El reemplazante de Pecly será Eduardo Dos Santos, representante del vecino país en Berna, Suiza, y ex embajador en el Uruguay.

La publicación no precisa el momento en que Itamaraty realizará el mencionado cambio, pero lo relaciona con el nuevo gobierno que tendrá el Paraguay a partir del 15 de agosto próximo.

A pesar de que los cambios de representantes son potestad exclusiva de cada gobierno, el reemplazo podría estar vinculado al roce que se había generado entre el ahora presidente electo, Fernando Lugo, y Pecly.

El embajador tuvo un percance con Lugo cuando éste pretendió ingresar a la embajada del Brasil en el Paraguay para dejar una carta dirigida a Jorge Miguel Samek, director brasileño de la Itaipú, donde expresaba su disconformidad con una serie de irregularidades vinculadas al pago que realiza el vecino país por la electricidad cedida por el Paraguay.

En dicha ocasión se vivió un clima de tensión entre los seguidores de Lugo y los diplomáticos brasileños.

Los roces motivaron incluso una manifestación de adherentes de la Alianza Patriótica para el Cambio frente al local de la Embajada brasileña.

MANIFESTACIÓN

Tras más de una hora de manifestación de adherentes de Tekojoja y del P-Más, Lugo ingresó al local diplomático e hizo entrega de la carta.

En dicha ocasión Pecly había dicho que se limitaría a hacer llegar la carta a la Itaipú, aclarando que Samek no es funcionario dependiente de la Cancillería de su país, y que solo por ello se había dado el malentendido.

TRIUNFO "HIDROPOPULISTA"

La edición de abril de la revista brasileña Veja publica un artículo firmado por Duda Teixeira donde califica al triunfo logrado por Fernando Lugo el 20 de abril pasado como "victoria del hidropopulismo".

El escrito afirma que la campaña política realizada por Lugo, basada en la recuperación de las usinas hidroeléctricas Itaipú y Yacyretá, se asemeja en la realizada en su momento por el presidente de Venezuela Hugo Chavez, que en su momento fue conocido como "petropopulismo".

Sin embargo, un cuadro anexo ubica al presidente electo como el menos populista, con relación a Chávez, Evo Morales, presidente de Bolivia y Rafael Correa, mandatario de Ecuador.

Apunta al ala liberal de la Alianza como un moderador de los partidos de izquierda aliados a Lugo.

Teixeira advierte que el Brasil no puede dejarse sorprender por una acción de Lugo, tendiente a la recuperación hidroeléctrica, tal como cuando Evo Morales decidió expropiar las refinerías que la gigante brasilera "Petrobras" tenía en territorio boliviano.

National Economic Trends

http://www.latimes.com/business/investing/la-fi-wrap1-2008may01,0,7827671.story

May 1, 2008

S&P gives Brazil credit rating boost

Brazil received an investment-grade credit rating for the first time from Standard & Poor's, sending the country's benchmark stock market index to a record high and yields on dollar bonds to an all-time low Wednesday.

Brazil, whose economy grew last year at the fastest pace since 2004, should be able to maintain annual growth of as much as 4.5%, S&P said as it raised the country's long-term foreign-currency debt rating to BBB-minus from BB-plus.

Brazilian exports have tripled since President Luiz Inacio Lula da Silva took office in January 2003 on rising world demand for soybeans, iron ore, beef and cars.

Once the world's largest emerging-market debtor, Brazil became a net foreign creditor for the first time in January as international reserves grew to a record $171.6 billion from $37.6 billion at the start of Lula's first term.

Credit-rating hikes usually lead to lower borrowing costs.

"It makes Brazil a more attractive place to invest," said Howard Appleby of investment management firm Northern Cross in Boston.

The Bovespa climbed 6.3% to 67,868.46 in Sao Paulo trading, making the index this year's best performer among the world's 20 biggest stock markets.

Business, Energy or Environmental regulations or discussions

http://www.milenio.com/index.php/2008/05/01/232574/

Negocia Brasil con Rusia instalar fábricas de aviones

“Estamos negociando, conversando con los rusos que deseen establecer fábricas en América del Sur”, dijo Jobim tras comentar las dificultades que tendría Venezuela para el mantenimiento de los aviones militares que compró a Rusia por la distancia geográfica.

Quito.- El ministro de Defensa de Brasil, Nelson Jobim, reveló al diario ecuatoriano El Comercio que su país está en conversaciones con Rusia para analizar la posibilidad de instalar fábricas de aviones y armas en América del Sur.

“┐Cómo se hace para dar mantenimiento a esos aviones, van a Moscú?”, preguntó el funcionario brasileño al señalar que la adquisición venezolana de aviones a Rusia originó “un problema logístico”.

Jobim realizó esta semana una visita a Quito para conversar con el gobierno ecuatoriano sobre la propuesta de Brasil de crear un sistema regional de seguridad.

Al referirse a las compras venezolanas de aviones a Rusia, Jobim sostuvo que esa opción, escogida por Caracas, después que Estados Unidos vetó a su país la venta de aviones brasileños Super Tucano, fue un error de Washington.

“Ese fue un error de los estadunidenses, porque (el mandatario venezolano) Hugo Chávez acabó comprando otros aviones a Rusia”, comentó.

El ministro brasileño también dijo que “está ultimándose” la venta de aviones Super Tucano fabricados por la compañía brasileña Embraer a Ecuador.

El presidente ecuatoriano Rafael Correa reveló que está en negociaciones con Brasil para la compra de 24 de esos aparatos, como parte una la modernización operativa de sus fuerzas armadas que le permita vigilar su frontera con Colombia.

http://www.bizjournals.com/atlanta/stories/2008/04/28/daily95.html

Thursday, May 1, 2008 - 2:44 PM EDT

Georgia trade delegation headed to Brazil with eyes on ethanol

A Georgia trade delegation, led by Lt. Gov. Casey Cagle, is departing next week for Brazil to continue expanding business ties between South America's largest country and the Peach State, Atlanta Business Chronicle has learned.

The trip is a fact-finding mission focused gathering more information and courting business ties with Brazil's ethanol industry during a week-long series of meetings scheduled in Sao Paolo, Brasilia and Mato Grasso.

The latest delegation follows two Georgia missions in 2007 to Brazil focused on potential opportunities for the state in Brazil's ethanol industry.

"The massive, emerging economies of such nations as Brazil, Russia, India and China represent the world markets of the future," Cagle said in a statement. "As we seek to bring high paying jobs to Georgia, engaging the government and business structures of nations like Brazil represents a critical challenge. This is where growth will take place, and Georgia cannot afford to be left behind."

Brazil has a smaller trade and business relationship with Georgia than other countries.

It is the 11th largest export destination for Georgia, totaling $495 million in 2007. Georgia imported $915 million in goods through the Savannah Customs District last year, according to state data.

Despite the existing trade ties, state officials have a keen interest is Brazil's ethanol industry. Along with newly discovered oil deposits, it has made the country energy independent. Georgia officials want to replicate some of that alternative energy success.

In November 2007 Colorado-based Range Fuels began construction of an ethanol plant in Soperton, Ga., the nation's first commercial ethanol plant, while Gov. Sonny Perdue has labeled Georgia the nation's "Bioenergy Corridor."

But Cagle's impending visit is the latest in a string of new connections between the two sides.

In 2005, Georgia's Brazil trade office was expanded to serve as a international development office.

This year, Brazil's newest U.S. consulate opened in Atlanta on Feb. 7, roughly four years after officials announced those plans during Perdue's 2004 visit to the country.

Former Georgia Gov. Zell Miller conducted a similar trip in July 1997.

http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSL0158943420080501

ENRC pays $300 mln for 50 pct Brazil iron ore stake

LONDON, May 1 (Reuters) - Kazakh mining group ENRC (ENRC.L: Quote, Profile, Research) paid $300 million for a 50 percent stake in a Brazilian firm developing an iron ore deposit, ENRC said on Thursday, in its first foray outside eastern Europe.

Eurasian Natural Resources Corporation Plc, already the world's sixth-biggest iron ore exporter by volume, said the project being developed by Bahia Mineracao Limitada (BML) was expected to produce more than 20 million tonnes of concentrate a year.

ENRC said it bought the stake from Zamin BM NV for $300 million in cash by exercising an option.

BML was developing an infrastructure plan and had already arranged for contractors to develop the project located in the Bahia state.

First output was envisaged for 2011 with full production by the following year, a spokesman said.

ENRC produces 17 million tonnes of iron ore concentrate annually, he added.

"We are excited by the prospects and the fundamentals of the iron ore industry. With this outlook we particularly welcome the opportunity to acquire an interest in BML," Chief Executive Johannes Sittard said in the statement.

In recent contract talks, the world's biggest iron ore producer Vale (VALE5.SA: Quote, Profile, Research) of Brazil agreed price hikes of 65-71 percent with steelmakers.

ENRC, also the world's biggest ferrochrome producer, said last month it held informal merger talks with rival Kazakhmys (KAZ.L: Quote, Profile, Research), but it must submit a formal bid by May 16 or walk away for six months under a ruling by the UK Takeover Panel.

Activity in the Oil and Gas sector (including regulatory)

Petrobras

http://www.reuters.com/article/marketsNews/idUSN3055467020080430

Brazil "throws cold water" on ethanol sector-Unica

RIBEIRAO PRETO, Brazil, April 30 (Reuters) - Brazil's ethanol industry cried foul on Wednesday after the government lowered a fuel tax on gasoline to limit the impact of a price rise at the refinery on consumers.

The government's move shattered the industry's hopes of improving its margins with the widely expected 10 percent hike in domestic gasoline prices that came from the state-run oil company Petrobras earlier on Wednesday. [ID:nN30543835]

Ethanol prices stay at or below 70 percent of the price of gasoline due to the lower mileage a liter of ethanol gets compared with gasoline, but gasoline prices have been held artificially low by the government which controls Petrobras.

The last time Petrobras raised prices was in 2005 when oil was at $60-$65 a barrel. It is now nearly double that.

"The government preferred to lose millions of reais in revenues from the Cide fuel tax to not expand the ethanol market," Antonio de Padua Rodrigues, the technical director of the Brazilian Cane Industry Association, said expressing the bitterness in the sector.

Ethanol prices are about 25 percent below what they were a year ago, due to the increase in production from heavy investment over the past few years, and in many regions have fallen to or below production costs, producers said.

Rodrigues said the government's decision to not allow improved revenues for the ethanol producers essentially "throws a bucket of cold water" on the industry's expansion.