Brazil exported 9.16 million mt of soybeans in the first three weeks of April, up 28% month on month, according to a report by the Brazilian foreign trade department. Shipments from Brazil rose 14% year on year to 18 million mt in the first quarter of 2020, with almost 74% of them going to China, the trade department said. Analysts said Brazil could export over 12 million mt of soybeans in April.
MiX Telematics has confirmed that one of Brazil’s largest ethanol and sugar producers have appointed the company to assist in modifying driver behaviour and reducing vehicle collisions. The major industry player accounts for 10% of ethanol supply in Brazil; grinding 27 million tons of sugarcane in one harvest year, resulting in the production of 2.1 billion litres of ethanol.
Brazil’s government is discussing with the country’s main airlines further reducing a minimal flight schedule implemented due to the coronavirus crisis as travel demand remains close to zero. A study by Brazil’s government found that there are too many empty or close-to-empty flights in the current schedule. The country’s three main airlines, LATAM, Gol and Azul, are also bleeding cash, like their peers around the world, with most of their fleets grounded.
Volkswagen AG said on Monday it will keep its factories in Brazil, South America’s top auto producer, shut through the end of the month, but that a decision has not been made on whether it will reopen them in May or later. The automaker has just reached a tentative deal with its unions that will keep workers net salaries intact, Volkswagen said. Gross salaries will be reduced but Brazil’s government will help make up the difference with subsidies.
The COVID-19 pandemic hit the Brazilian equity market hard, causing the worst monthly performance since September 1999. As measured by the S&P Brazil BMI, the Brazilian equity market lost 29.80% in March 2020. The S&P/B3 Low Volatility Index exceeded its benchmark by 640 bps during the same period. Moreover, the low volatility strategy presented superior cumulative and risk-adjusted returns over the 20-, 10-, and 5-year periods.
Brazilian chicken production fell in the first quarter, according to a meat lobby group, while industry sources told Reuters some poultry producers were already making moves to further cut future output in the coronavirus pandemic. Preliminary data indicates “a slight reduction” in Brazilian chicken output in the first three months of the year as the outbreak dragged down the domestic market, meat association ABPA said.
The losses to the hotel sector in the month of April in Rio de Janeiro state, due to the pandemic of the COVID-19 and isolation measures, has been estimated at R$130 million ($24.6 million), according to sector representatives. But despite the grim news expected for April and May, officials say that a recovery should begin to be seen by June, and getting stronger during the second half of the year.
Brazil appears set to embark cautiously on unconventional monetary policy using small interventions to tackle dysfunction in bond markets, as it does with foreign exchange, but the severity of the crisis may ultimately force it to emulate the dramatic steps taken in the United States and Europe.
Brazil’s central bank president Roberto Campos Neto said that Latin America’s largest economy will begin to recover from the coronavirus crisis in the fourth quarter. Meanwhile, Presidente Jair Bolsonaro said that Brazil’s federal government will be expected to compensate states more than 100 billion reais (US$19.09 billion) in tax revenue lost due to lockdown policies that have negatively affected the economy, but he added that there is no room in the country’s budget to afford those costs.
Global demand for coffee has increased with more people looking for coffee during lockdown, but the already-tight supply could tighten even further as major coffee exporters Brazil, Colombia and Peru face difficulties in finding farmers to harvest coffee beans.