EU expects Brazil to join global methane effort

Study Identifies Methane 'Super-Emitters' in Largest US Oilfield – Climate  Change: Vital Signs of the Planet

The European Union says it continues to expect Brazil to join a global effort to reduce methane emissions by at least 30% by 2030, from 2020 levels, which could accelerate the green transition in agriculture. This initiative is expected to be launched at the Climate Change Conference, in two weeks’ time in Glasgow.

Brazil is the fifth largest emitter of this powerful greenhouse gas in the world, with 5.09% of the total, only behind China (15.1%), Russia (10.4%), India (8.15%) and the United States (7.62%), according to World Bank data based on 2018.

Without agriculture, Brazilian methane emissions represent 1% of the world total. The largest contribution to methane emissions specifically related to livestock comes from Latin America, half of which from Brazil, the country with the largest commercial bovine herd in the world.

“Brazil is an important economy, and to make global progress all countries, particularly the big emitters and the large economies, will need to demonstrate leadership and take action,” an environmental area official at the European Commission, the EU’s executive branch, told Valor.

A European official says that “high-level meetings” with Brazilian representatives took place in early September to discuss the effort. The Brazilian side indicated at the time that it was continuing to consult internally with all the ministries involved to consider joining the global commitment.

“The EU hopes that Brazil will join the commitment at COP26 and is ready to provide further explanations on technical and other aspects,” stated the European representative.

For some observers, an absence of Brazil should fuel the negative perception of the Bolsonaro administration in the environmental front. The Brazilian government’s resistance to concretely engage in this fight also “naturally exhausts the patience of interlocutors at some point,” says a source.

The initiative on methane led by the EU and the U.S. already has more than 30 participants, but it does not yet have four of the top five emitters – China, India, Russia and Brazil, members of the BRICS, the group of big emerging countries. The EU notes, however, that it already has 9 of the 20 largest emitters, representing around 30% of global methane emitters and 60% of the world economy. In addition, more than 20 philanthropists have announced commitments totaling more than $200 million to support the implementation of the Global Methane Pledge.

After carbon dioxide, methane is the second most important greenhouse gas responsible for global warming and air pollution, mainly resulting from energy, agriculture and waste activities.

Methane remains in the atmosphere only for about nine years, but it has a warming impact 84 times greater than that of CO2 over a 20-year period. It is responsible for about 30% of the global rise in temperatures so far.

Most of these emissions come from three sectors: agriculture (40% of emissions, with livestock – fermentation from the digestion of animals and manure – and rice farming), fossil fuels (35%, due to leakage during extraction, exploration and distribution of gas and oil, but also in coal mines) and waste (20%, particularly in open dumps where organic matter decomposes).

A report by the United Nations Environment Programme points out the greatest mitigation potential by region: in Europe and India it is in the waste sector; in China, in charcoal production, followed by livestock; in Africa, in livestock, followed by oil and gas; in the Asia-Pacific region, excluding China and India, it is coal and waste; in the Middle East, North America and Russia/former Soviet Union states it is oil and gas; and in Latin America it is in livestock.

According to this UN agency, methane emissions could be reduced by 45% by 2030 using existing technologies and at a “reasonable cost.” This would make it possible to quickly slow down the pace of warming in the short term. For the International Energy Agency (IEA), the reduction of methane emissions can be more impactful in limiting climate change in the short term, with improvements in public health and agricultural productivity.

Changes in cattle feed would already help to reduce enteric fermentation (digestion of organic materials by ruminants) and the major source of this emission, which is released by flatulence.

Source: Valor international

https://valorinternational.globo.com/

Votorantim, CPP create electricity giant

Pesquisa considera Votorantim como cidade desigual

The Votorantim group and CPP Investiments – the investment arm of the Canadian pension fund CCPIB –announced on Monday the creation of a new energy company in the country. The electric company has a market cap of R$17 billion and will be listed in the New Market of the São Paulo Stock Exchange B3.

“The new company is born robust, capitalized and with the purpose to continue investing in renewable energy generation assets – hydraulic, wind and solar,” said João Schmidt, CEO of Votorantim, and Rodolfo Spielmann, general director of CCP Investments for Latin America, in a joint statement.

The two partners will bring together the operations they have under a holding company controlled half and half by them, in addition to other assets in the new company – still unnamed. In the operation, CCP will invest R$1.5 billion in the business, while Votorantim Energia incorporates Votener (its energy trading company, the second in the country) and other assets.

Under the joint venture, called VTRM, are Companhia Energética do Estado de São Paulo (Cesp), acquired in 2018, and four wind farms located in the state of Piauí.

The second step of this transaction is the corporate reorganization of Cesp, with the incorporation of all its shares by VTRM. The operation was presented Monday to the generating company’s board of directors to obtain the approval of the shareholders. Today, Cesp has its shares listed at level 1 of B3.

According to the proposal, the controlling and minority shareholders of the power generator will receive shares in the new company, already listed on the Novo Mercado. After the operation, Cesp will become a wholly-owned subsidiary.

Currently, VTRM owns 40% of Cesp’s total capital, a share resulting from the 95.3% of ON shares and the 13.7% of PNB shares it holds.

If the deal is approved as presented, VE will hold 38% of the new company’s capital, CPP will hold 32.1% and Cesp’s minority shareholders (pulverized in the market) will hold 29.9%, informed VE CEO Fábio Zanfelice.

The new company is born with a diversified energy matrix, an installed capacity of 3.3 GW and estimated annual net revenue of R$ 5.8 billion at the base value of 2020.

Cesp has hydroelectric plants in the countryside of São Paulo state, capable of generating 2.3 GW. The four wind farms in Piauí – two in operation and another two that start generating in February – add up to 1 GW of power.

Another major asset is the energy trader Votener, with more than 2.6 GW average marketed in 2020, according to information from VE. It has a portfolio of more than 400 customers. “It will act as a market intelligence center, making it a key piece in the current and future generation portfolio of the new company,” highlights Mr. Zanfelice.

The new electricity company also inherits a pipeline of projects under development with future installed capacity of 1.9 GW – of this number, 1.7 GW of solar generation in the Northeast region, 160 MW of small hydroelectric plants (SHPPs), and 68 MW of hybrid generation (wind and solar) in the parks in Piauí, which already has special authorization from Aneel.

According to Mr. Spielman, CPP has already invested around R$3 billion in the partnership with the Votorantim group, including this operation. At the moment, Brazil is the only country in Latin America where it has made investments in renewable energy. CPP is also present in infrastructure operations (in the case of sanitation), private equity, real estate, and private credit.

Source: Valor international

https://valorinternational.globo.com/

Health Brazil reports all-time lowest moving average of deaths from COVID-19

SP: hospital público permite visitas de despedida a pacientes com covid-19  - 18/08/2020 - UOL VivaBem

On April 19, 2021, Brazil recorded the highest moving average of deaths from COVID-19—some 3 thousand fatalities daily. Today (Oct. 19), exactly six months after the peak of the pandemic, the country’s Health Ministry reports that mass vaccination against disease has proved effective: deaths plummeted by nearly 90 percent. The trend has been observed since June.

The moving average of deaths stands at 379.5, followed by a sharp decrease in the number of new cases of the disease—12.3 thousand a day.

“The vaccine is the answer to bringing an end of the pandemic character of the disease. It is the only way we can go back to normal,” Health Minister Marcelo Queiroga declared in a note, adding that the government has acquired 550 million doses of the vaccine against COVID-19, invested billion in ICU beds, and vaccinated more than 90 percent of the Brazilian population with the first dose.

According to Queiroga, the country’s vaccination campaign should continue in 2022 as 354 million doses of vaccines approved in the country have been purchased early. The vaccination plan for 2022 was unveiled early in October.

“We have 300 million doses guaranteed, to vaccinate our people. It will be a little different from what happened in 2021, because it is not primary vaccination, but the important thing is, we will have vaccine doses for everyone,” said Queiroga.

The ministry’s vaccination dashboard shows that more than 108 million Brazilians are now fully vaccinated—68 percent of the target public of the National Immunization Program. Furthermore, 3.6 million people have received the booster dose, recommended for those aged 60 and older, immunosuppressed people, and health agents.

Source: Agência Brasil

https://agenciabrasil.ebc.com.br/en

President submits to Congress expansion of Mercosur–Colombia deal

President Jair Bolsonaro on Thursday (Oct. 14) submitted to the National Congress an additional protocol expanding the agreement between Colombia and Mercosur, the bloc formed by Argentina, Paraguay, and Uruguay. The text introduces free trade of services and requires approval from the Congresses of signatory countries to become effective.

The move comes days before Colombian President Iván Duque is expected to visit Brazil, on October 19.

Also covered by the protocol is the temporary entry of service providers in the signatory countries, cooperation for the mutual recognition of professions and diplomas, and the establishment of courts or procedures for regulating the agreement.

History

In 2017, Mercosur and Colombia inked a trade deal to try and establish a free-trade area between the countries, stimulate investment, and bolster economic, energetic, scientific, and technological cooperation. The compact also set yearly import rates for auto products.

In 2018, the Mercosur countries and Colombia signed the first protocol including services in the economic partnership. However, the text was revised and a new protocol was signed in December last year, which was now submitted to Congress.

In a note, the president’s secretariat reported that the protocol is expected to increase legal security and predictability, improving the business environment and making the trade of services cheaper between Brazil and Colombia. “It should, therefore, generate increasing opportunities to Brazilian service providers, making Brazil more attractive to Colombian investors and facilitating the import of Colombian services that help raise productivity in Brazil’s domestic market and its competitiveness overseas,” the statement reads.

Source: Agência Brasil

https://agenciabrasil.ebc.com.br/en

Solar power system prices surge driven by China, high demand

The prices of equipment for solar power generation have soared with the worsening power crisis in China, the world’s main supplier of the photovoltaic industry. According to equipment manufacturers and distributors, the prices of panels, which were already under pressure, have escalated again with occasional shutdowns in factories of silicon, a component that can represent up to 60% of the cost of the panel.

Supplying companies are not working with the possibility of a shortage of products, but say they see a troubled price scenario until at least June 2022. Despite this, the consensus is that the growth of the solar market is not threatened – demand for generation systems, whether for large developments or rooftop solar, has been so strong that the outlook remains positive.

The prices of panels and inverters started an upward trend last year, due to the disruption in the production chains caused by the Covid-19 pandemic, in addition to the increase in demand itself with the adoption of solar technology around the world. At the end of 2020, the sector even suffered from a shortage of glass, and now the big problem is silicon. In the case of Brazil, to this scenario is added the currency depreciation – the main components of photovoltaic systems are imported, and China is responsible for about 80% of the global production of panels.

In the view of the Chinese-Canadian manufacturer Canadian Solar, prices are expected to stay under pressure in the coming months.

“Shortage of material is very unlikely, but we will see a greater need for programming by customers. The uncertainties curb the commercial impetus, companies shift to the safety mode, waiting for the supply to return to normality,” said Pedro Alves, executive director for Latin America at Canadian Solar.

One of the world leaders in the photovoltaic industry, Canadian Solar produced panels in Brazil, but closed down its factory. Today, all the materials it supplies are imported. According to Mr. Alves, the company already has a local stock of 2,000 to 3,000 containers and says it is ready to meet the demand without major difficulties in the coming months.

At Aldo Solar, which supplies equipment for mini and micro solar generation, the third quarter started with a promising prospect, but the crisis in the Chinese market quickly brought a change of course. One of the biggest problems has been the logistical issue.

“The shipowners don’t give shipping guarantees. We are running an average of five to eight weeks late, with containers on the floor. They are skipping the port [of Paranaguá], because there isn’t room in the ships to come to Latin America,” said Aldo Teixeira, the distribution company’s founder.

The executive said supply is guaranteed for what was scheduled in the middle of the year. “If we had the capacity to double the volumes, we would do so. Demand is very high.” Founded in Maringá, Paraná, Aldo Solar was acquired this year by Brookfield Business Partners, the asset management firm’s private equity arm.

From the investors’ side, the increasing cost of the generation systems would tend to slow down the growth of the solar market, but the market is not betting on that. Aldo Solar, for example, predicts doubling its revenue in 2021 to R$3.2 billion in the wake of the expansion of solar generation for residences and businesses.

“The electricity bill has gone up a lot with tariff adjustments and tariff flags, and this has virtually offset the increase in the cost of the solar panel. That’s why the demand continues to accelerate, it’s still a good investment. The payback of the systems has remained unchanged,” said Rodolfo Meyer, CEO at Solar Portal.

According to a survey carried out by Portal Solar, an online power marketplace, the total investment for the installation of a 2 kilowatt-peak power system, for a monthly energy bill of R$250, is R$16,700. The figure is 15% above the level seen in March 2020, before the pandemic.

“In this case, the return on investment happens in a little more than five years. For larger systems, of 52 kWp, for monthly bills of up to R$7,000, the return is in three years, it’s a great investment,” Mr. Meyer said.

The Brazilian Photovoltaic Solar Power Association (Absolar) said the sector is facing “growing pains” worldwide. The head of the entity, Rodrigo Sauaia, points out that the main manufacturers are expanding production capacity, so the supply situation tends to improve in the medium term.

In the case of large solar projects, the increase in capital expenditure can postpone projects. However, Mr. Sauaia understands that, at this moment, generation companies are looking more at other factors, such as higher demand for long-term contracts in the free energy market and the window until the end of subsidies for renewable sources. The trade group predicts that Brazil will reach 12.5 gigawatts of installed capacity of solar power this year, up 60% from 2020.

Source: Valor international

https://valorinternational.globo.com/

Congress may put off federal debt payment until 2030

Petrobras, PetroRio and CSN issue debts abroad - Murray Advogados

The value of the court-ordered debts deferred as of 2022 may reach R$346.7 billion in 2030, considering the design defined in the report of the Constitutional Amendment Proposal (PEC) that deals with the matter, released last week. By 2025, the amount may reach R$118.9 billion, according to estimates by technicians in Congress.

The projections in the Parliament consider that 10% of the payments of the bulk of judicial sentences would have a 40% discount for the private sector, to be carried out before the debts are issued by the courts.

The scenario to which Valor had access is considered “prudential,” because it considers low adhesion (only 10%) in the alternative with a 40% premium. The experts made alternative simulations, considering a scenario of inflation above 3.5% and higher volumes of discounted payments and account balancing.

In the following years, the estimates of the technicians consider that the volume of court decisions, even with some drop in 2023 and 2024 will still be well above the limits for issuing and payment of court orders, according to the text of the PEC.

According to the PEC, of the R$89 billion of those debts expected for 2022, R$38 billion would be paid next year, according to the Congress. The other more than R$50 billion remain open and can be partially renegotiated between the parties or be included in the settlement of accounts between the federal government and the states, for example. The technicians’ estimates simulate how much is paid over the years and how much is put off, considering a 10% use of the 40% premium prerogative in negotiations with the private sector.

A crucial point to make room for more spending next year, especially the program that will replace cash transfer program Bolsa Família, is the opinion presented to the PEC, which raises several questions. There are uncertainties about how the rule limiting the issuance of court orders in the Judiciary would be regulated and enforced, for example.

There are also questions about what is inside or outside the spending cap of the amounts of debts that exceed the R$38 billion to be paid next year, calculated upon the amounts paid in court sentences in 2016, inflation-adjusted.

Even the amount of those debts to be mandatorily paid in 2022 is not consensual. While in the accounts of government technicians it would be around R$40 billion, in the calculations of Congress sources it would be around R$38 billion.

It also raises diverging interpretations of the possibility of an offsetting of debts between the federal governments and the states and municipalities. There are those in Congress who believe that, as it is written, this meeting will not be optional. It will be enough for the federal government to want to make this compensation. But the government itself does not have this interpretation, given that the debts of states and municipalities are contractual and cannot have unilateral measures.

There are also accounting uncertainties in this question. A group of technicians understands that this meeting of accounts, with the current text, is already outside the spending cap, because it is a patrimonial adjustment between the government, states and municipalities. However, another wing does not see that this is clear, in spite of the spirit of the proposal, and considers that the text needs to be improved.

A public accounts specialist, Senate analyst Leonardo Ribeiro says that the text by congressman Hugo Motta (Republicans of Paraíba) has many obscure points. Mr. Ribeiro criticizes the provision that limits the number of orders that courts can issue. “It is a new tax rule, which allows the creation of hidden liabilities, which will not be real court-ordered payments. This debt will be in a limbo; it won’t be recorded in the fiscal accounting,” he pointed out.

Source: Valor international

https://valorinternational.globo.com/

Courts block judicial reorganization for companies with tax debts

The US Corporate Reorganization Rules - Asena Advisors

Companies under judicial reorganization that have tax debts are finding it difficult to move forward with their cases. Courts in at least three states – São Paulo, Rio de Janeiro and Paraná – have changed their jurisprudence and now require tax good standing certificates for the proceedings to continue.

In the Superior Court of Justice (STJ), some justices are also confirming rulings by judges of tax foreclosure courts that allowed the attachment or blocking of debtors’ assets.

These situations, until recently, were rarely seen in Brazil’s justice system. The change is due to the new Bankruptcy Law (No. 14,112, of 2020), which came into effect on January 23 and is beginning to be discussed in the courts.

Companies under judicial reorganization bear a huge volume of tax debts. With the federal government alone, there are about R$170 billion, a survey updated in April by the Attorney General’s Office of the National Treasury (PGFN) shows. Of this total, a low portion, of R$24.2 billion, is in a regular situation – the taxpayer has presented a guarantee for the debt or joined an installment plan, for example.

The presentation of the tax good standing certificate is provided for in law since 2005 as one requirement for the judicial reorganization. But judges used to ease this rule due to the lack of suitable installment plan for embattled companies to pay off their tax debts.

With the new law, however, this argument has lost its force. Companies under protection from creditors now have options. They can choose between two installment payment modalities: up to 120 installments or use tax losses to cover 30% of the debt and pay the remainder in up to 84 months.

In addition, with the new law they have more advantages in the so-called tax transactions. They can, for example, pay their debts in up to 120 months and with up to 70% discount on interest and fines. Other taxpayers get at most 50%, and have to pay in up to 84 months.

The judges have taken this change into consideration and accepted the requests that have been filed by the federal government against first instance decisions that allowed judicial reorganization cases to move forward without the presentation of tax good standing certificates. At least 34 appeals have been filed since the new law went into effect.

The first decision on this topic in the São Paulo Court of Justice (TJ-SP) was recently handed down unanimously by the 2nd Chamber of Business Law. The judges defined a deadline of 60 days for the company to prove its regularity by settling or paying its debts to the National Treasury in installments. Otherwise, they said, the company will be declared bankrupt.

“If there is applicable legislation, there is no way the Judiciary branch can decide otherwise,” said the rapporteur, High Court Judge Ricardo Negrão, in his vote (Case No. 2248841-13.2020.8.26.0000).

The company affected in this case is Catanduva-based Maralog Distribuição. The PGFN said in the appeal presented to the judges the company has more than R$58 million in debts with the federal government.

The TJ-SP has two Business Law chambers. The first one is expected to manifest itself for the first time on this subject next Wednesday. The case involves Ellc Máquinas e Equipamentos and has as rapporteur Judge Cesar Ciampolini (Case no. 1059817-42.2018.8.26.0100).

Recently, in a monocratic decision in another case, Mr. Ciampolini granted the federal government’s request. He suspended the enforcement of the recovery plan of Ponto Final Participações e Empreendimentos – a company linked to Grupo Davene. The company was prevented from paying unsecured creditors and selling assets.

According to PGFN, the company owes more than R$170 million in federal taxes. Mr. Ciampolini’s decision was given on a preliminary injunction basis, until the board of appeals judges the case (No. 2215483-23.2021.8.26.0000).

Luiz Deoclécio, director of OnBehalf, who acts as trustee in this case, says there is discussion about the formation of an economic group and tax debts that would belong to other companies. “It is a decision to be followed up,” he said.

In relation to the market as a whole, he added, it is unlikely that debtors will be able to move forward without at least demonstrating that tax debts are organized and within their recovery plan.

Source: Valor international

https://valorinternational.globo.com/

Commodities account for 70% of Brazilian exports

Commodities: o que são, para que servem e como investir

The price hike resulting from the several pandemic shocks contributed to the growth of commodities as never before in Brazilian shipments. From January to September this year, commodities reached a milestone for the period – 69.7% of total exports. In the same months of 2020, it was 67.5%. The level this year is almost ten percentage points above that of 2019, 60.6% – about the average of the last ten years, considering the same nine months.

The data seen by Valor are from the Foreign Trade Indicator (Icomex), collected by Fundação Getulio Vargas’s Brazilian Institute of Economics (FGV/Ibre) based on official data. The Icomex survey with further details will be released next Monday.

Despite the broad scenario, data from Icomex show that in the last two decades there has been a concentration of exports in fewer and fewer products and a decline of manufacturing in which goods intended for exports have less and less added value, even within commodities. The pandemic has accelerated these phenomena, highlighting the need to discuss structural changes, analysts point out, despite the current robust trade surpluses that help to reassure the foreign sector accounts.

Lia Valls, an economist and associate researcher with Ibre, responsible for the Icomex survey, says that new structural changes after the pandemic make it uncertain how much of the current advance of commodities will remain, but it is unlikely that the share will be below 60% of exports in the medium term.

Data from Icomex show that despite the recent acceleration, the growth of commodities in Brazilian exports has happened consistently. In 2001, these basic products accounted for 37.4% of shipments from January to September. In 2009, the share reached 54.5% of exports, in a year when international trade shrank and total Brazilian exports fell, but shipments such as iron ore and soy suffered less, driven by demand from a Chinese economy that fell less than the world average. In 2021, the phenomenon is different. Total exports grow, but commodity shipments increase at a faster pace. Prices set the pace of increase. From January to September, the average export prices rose 30.6% while the volume increased 4.1%.

Welber Barral, a foreign trade strategist at Ourinvest, says that there is a broad factor in the advance caused by commodity prices, which, even in an adjustment process, should still remain high. “There is inflation worldwide, with higher energy, gas and freight costs, in addition to possible effects of the delta variant, which should keep pressure on prices.” For him, these factors will still be present along 2022.

There is also a structural issue, he adds, of loss of diversification and exports’ focus on primary products, with an increasingly concentration of basic products. Semi-finished goods have lost space in shipments, he points out, referring to products such as pig iron, orange juice and sugar, which are made of basic raw materials, with some level of industrialization. This, he points out, comes along with the loss of the industry’s share in the economy, affected by competitiveness problems, such as logistics and tax issues.

Still according to Icomex data, the share of processing industry goods in Brazilian exports of commodities fell from 36.9% from January to September 2020 to 32.8% in the same months this year. This, says Ms. Valls, shows that primary products now play a prominent role in exports. The phenomenon is also visible over the past 20 years. In 2017, the share was 40.9%. In 2008, it was 51.1%, and in 2001, 60.4%, always from January to September.

The concentration on a few goods is clear when looking at the data for iron ore, soybeans and crude oil, the main items shipped by Brazil. The trio of products rose from 38.3% to 43.7% of the country’s total exports from 2020 to this year, reaching a record level for the period from January to September. In 2013, these goods accounted for 30.7% of exports. In 2001, to 11.9%, considering the same nine months.

“These are goods whose prices we have no control over whatsoever,” said José Augusto de Castro, president of the Foreign Trade Association (AEB), indicating one of the negative factors of the greater dependence on commodities.

At the present moment, he exemplifies, there is uncertainty about the possible effects of the Evergrande crisis. The fear is that the company’s high indebtedness will contaminate other sectors of the Asia nation’s economy, compromising the growth and demand for products that Brazil exports, such as iron ore and soy. “And how many Evergrande are there in China?” For him, the trade surplus of 2020 and the expectation of another robust balance this year end up diverting attention to a necessary debate about the change in what Brazil exports.

“There seems to be an illusion that prices will always rise or stay high,” says Mr. Castro. According to his view, it would be necessary to take the opportunity of the current scenario to make structural reforms that are essential for industrial activity and for the export of products with higher added value.

A competitive environment is essential to diversify and add value to exports says Mr. Barral, who mentions aluminum as an example. The former foreign trade secretary recalls that aluminum manufacturers had a great interest in Brazil about 20 years ago. An important part of the investments, however, did not come due to a not very competitive environment, he says. Therefore, he says, the opportunity to develop a bauxite processing industry was lost, an abundant raw material in the country, from which scale, productivity and export competitiveness could be gained.

Source: Valor international

https://valorinternational.globo.com/

Nubank turns profit for first time as New York IPO looms

Fim da NuConta! Veja o que o Nubank fará com o SEU dinheiro

Nubank, the Brazilian bank that is about to launch its IPO in New York, will have good results to show investors.

The company turned a profit for the first time, with R$76.3 million in the first half, reversing the negative result of R$95 million in the first half of 2020. The company ended June with more than 41 million customers in Brazil – up 25% from the preceding semester and 60% in 12 months. This means, on average, more than 40,000 new customers a day.

The bank’s credit portfolio reached R$23 billion, according to Central Bank criteria, while gross income from financial intermediation totaled R$502.645 million. Revenues from fees and banking services reached R$1.464 billion. Administrative and personnel expenses totaled R$1.492 billion.

The numbers refer only to operations in Brazil and exclude Nubank’s final indirect controlling shareholder, Nu Holdings. The company has operations in Mexico and Colombia.

“The fact that the financial intermediation profit has grown at a faster pace than the financial intermediation income means that our margin continues to expand – it went to 47% in the first half of 2021 from 45% in the first half of 2020,” said Guilherme Lago, Nubank’s financial vice president, in a post on the bank’s blog. The company added that the profit will not be distributed to shareholders – “it will remain in the company to be reinvested in new innovative products and services for our clients in the country.”

According to Nubank, the volume of payments on its cards (TPV) totaled R$92 billion in the first half of 2021, an increase of 105% over the same period last year. “In short, the first half of 2021 was yet another reinforcement that we are on the right path by putting our customers at the center of everything we do.”

Source: Valor international

https://valorinternational.globo.com/

Brazil wins battle with India over sugar at WTO

WTO | dispute settlement - the disputes - DS581

Brazil achieved a thorough victory against India in the dispute about sugar at the World Trade Organization (WTO), Valor has learned. This litigation has an impact on the sugar international market and on the positioning of the two largest producers in this market.

The panelists’ final decision has already been sent to the parties involved and should be announced by the global entity by the end of this month. The dispute involves export subsidies and domestic support, in the form of minimum prices, to Indian producers. When Brazil took the case to the WTO, the Foreign Affairs Ministry, known as Itamaraty, calculated that the Indian “boost” caused a drop in international prices and losses of at least $1.3 billion per year to Brazilian producers.

Brazil is the world’s largest sugar producer and exporter. India is the second-largest producer and, with the help of subsidies, has become the third-largest exporter. With a production surplus, it can throw a lot of cheap sugar on the market.

The WTO ruling in this dispute is likely to signal that India will need to change its legislation on export subsidies and domestic support for sugar. Once the decision is publicly announced, New Delhi is likely to appeal, despite the WTO Appellate Body being inoperative.

This means that a final decision will take months, if not years. If the Indians do not appeal, they will then have to negotiate with Brazil a deadline to bring their legislation into line with international rules.

The Indian government has already started to prepare its domestic environment for a defeat, admitting in the local press that the dispute with Brazil is likely to have a “bitter taste” in the coming days.

Brazil went to the WTO against India in February 2019, initially with consultations that failed. Later, the country had the participation of Australia and Guatemala in questioning aspects of the Indian support system for the sugar sector, in particular, the program to maintain sugarcane prices

A study on agricultural perspectives until 2030, prepared by the Organization for Economic Co-operation and Development (OECD) and the UN Food and Agriculture Organization (FAO), gives an indication of what is at stake in this dispute between Brazil and India

The study foresees that Brazil should maintain its position as the world’s largest sugar producer, closely followed by India. The two countries will represent 21% and 18% of the total world’s sugar production, respectively, around 2030. In absolute terms, compared to the 2018-2020 period, this means an additional production of 5.8 million tonnes by Brazil and 5.1 million tonnes by India.

Until 2030, sugar exports are also expected to remain highly concentrated, with Brazil consolidating its leadership and increasing to 43% from 39% of global shipments. Brazilian exports are estimated to represent 72% of the increase in world trade. The second-largest exporter is Thailand.

India has third place, with enough supply to maintain a high level of exports, mainly in the form of white sugar. However, if the Indian government continues its efforts to increase ethanol production, sugar shipments could slow down.

Brazilian producers have been trying to intensify bilateral cooperation with India in the biofuels segment to promote the production and use of ethanol. For Brazil is always interesting to create conditions for the formation of a global ethanol market, as well as to prevent a competitor from boosting its sales with illegal subsidies.

The international sale of sugar today amounts to only 10% of what is produced. And the objective is the “commoditization” of ethanol in the coming years.

Source: Valor international

https://valorinternational.globo.com/