Agreement includes supplying marine fuel blends and studying new export, import, and cabotage routes
03/28/2025
Vast Infraestrutura, the liquid bulk logistics subsidiary of Prumo Logística, and biodiesel producer Be8 have signed a memorandum of understanding (MoU) to explore the development of the marine biofuel market at the Port of Açu, located in São João da Barra, Rio de Janeiro state. The agreement, which will remain in effect for up to two years, involves the use of infrastructure provided by Vast to connect Be8 and fuel distributors with clients operating at the port.
The companies aim to supply vessels docking at Açu with marine fuel (bunker) blended with biodiesel—or even pure biodiesel (B100). Currently, Brazil’s National Agency for Petroleum, Natural Gas and Biofuels (ANP) allows up to 24% biodiesel (B24) to be blended into marine fuels such as marine gas oil (MGO) or heavier intermediate fuel oil (IFO), without requiring engine modifications.
The partnership will assess the potential use of the Açu Liquid Bulk Terminal, a facility whose construction is set to begin in April and which has been designed to be flexible and scalable in line with market demand.
According to Vast’s commercial director Eduardo Goulart, roughly 7,000 vessels currently operate through the Port of Açu each month—primarily for oil transshipment—and most of them do not use biofuels. “Açu is naturally a hub for marine fuel, and our clients are already seeking low-emission alternatives,” Mr. Goulart said.
Those 7,000 vessels represent a potential demand of about 30,000 tonnes of biodiesel per month, assuming a 24% blend ratio with the average 120,000 tonnes of monthly marine fuel distributed at the port.
“That matches the output of our Be8 plant in Passo Fundo, Rio Grande do Sul. It’s a significant volume,” added Leandro Zat, Be8’s vice president of operations. The plant produces about 39 million liters of biodiesel per month—approximately 30,000 tonnes. Each tonne of biodiesel is estimated to reduce 2.86 tonnes of carbon dioxide emissions.
If the studies confirm technical and market feasibility, supply would likely begin with B24 blends and gradually increase to B100 over time, according to Mr. Zat. “There’s growing demand for maritime decarbonization, and I’m sure Vast, Be8, and other companies aligned with this purpose are ready to meet it. These are companies walking the talk,” he said.
The companies will also evaluate whether the Port of Açu could become a hub for importing raw materials used in biodiesel production or a new base for biodiesel exports and coastal shipping, which would improve logistical efficiency.
In addition to Vast Infraestrutura, Prumo Logística also has a joint venture with British oil major BP called Efen, focused on producing renewable fuels—particularly hydrotreated vegetable oil (HVO), also known as green diesel.
The MoU comes just months after the enactment of Brazil’s “Fuel of the Future” law, which mandates minimum blending percentages for biofuels in fossil fuels.
Monetary authority Chief Gabriel Galípolo says unanchored expectations require “greater effort”; institution sees 70% chance of inflation above target in 2025
03/28/2025
The persistence of inflation and the perception that it will remain above the target has not only led to a sharper increase in Brazil’s benchmark interest rate, the Selic, but may also require it to stay high “for longer,” officials from the Central Bank said on Thursday (27).
“We talk a lot, we write a lot, we are aware that, with expectations unanchored at the current level, the Central Bank’s effort needs to be greater,” said Central Bank Chair Gabriel Galípolo during a press conference on the Monetary Policy Report. “That is precisely why we have moved forward and continue in a cycle that has pushed interest rates to historically high levels.”
It was the first time Mr. Galípolo took part in presenting the report — which replaced the Inflation Report — as head of the monetary authority.
“When expectations are unanchored, interest rates must be higher, as we are seeing in this cycle, and for longer — that is the second dimension [of the adjustment],” said Diogo Guillen, the Central Bank’s director of economic policy, during the same press conference.
Mr. Guillen echoed what had been written in the minutes of this month’s Monetary Policy Committee (COPOM) meeting, published on Tuesday. The document noted that long-term unanchored expectations make it harder to bring inflation back to the target and require “a tighter monetary policy and for longer than would otherwise be appropriate.”
In its baseline scenario, the Central Bank projects inflation of 5.1% this year and 3.7% in 2026. Inflation would only approach the continuous target of 3% in the third quarter of 2027, when it is expected to fall to 3.1%.
Mr. Galípolo said the Central Bank knows that, in the short term, it will face inflation above the target and, therefore, more contractionary interest rates. The monetary authority sees a 70% chance of the IPCA consumer price index ending this year above the upper limit of the target range (4.5%) and zero probability of falling below the lower limit. For 2026, it estimates a 6% chance of inflation falling below the lower limit and a 28% chance of exceeding the upper limit.
Mr. Galípolo avoided giving any hints about COPOM’s next steps. Last week, the committee signaled a further increase in the Selic rate at its May meeting, but likely smaller than the hikes made at the two previous meetings. Last week, the COPOM raised the Selic from 13.25% to 14.25%.
The signal of a smaller hike left open the possibility of an increase of 25, 50, or 75 basis points. Market odds currently favor a 50-bp hike, though a 75-bp increase remains on the table.
When asked about how he viewed market bets, Mr. Galípolo refrained from giving a clear signal. “If we were convinced, we would have written that [in the minutes],” he said. “I believe the minutes are still quite valid, they’re not outdated. We want to preserve these degrees of freedom to be able to make that decision at the right time.”
However, the Central Bank chief made it clear that the monetary tightening is not over. “For all the existing reasons, the cycle needs to be extended. However, due to the uncertainties, to a lesser extent. We can only provide guidance for the next meeting about what we intend to do,” he said.
Mr. Galípolo also gave further clarification on why the COPOM’s statement and minutes referred to the “lags inherent to the monetary tightening cycle” to justify the signal of a smaller Selic hike at the next meeting.
“We are now entering a level of interest rates that is contractionary with some certainty,” he said. According to him, the Central Bank is monitoring economic activity data and other indicators, such as expectations, to “understand whether this level of monetary policy is contractionary enough.”
When asked whether the impact of the new payroll-deductible loan program for private-sector workers had been factored into the Central Bank’s projections, Mr. Galípolo said it had not and explained that several uncertainties remain.
One of them is whether the measure will result in a new flow of credit or simply a replacement of old debt with new debt. He said he did not see the program as a government initiative to stimulate the economy at a time when the Central Bank is seeking to cool it down to lower inflation. “It is a measure more focused on structural rather than cyclical issues,” he said.
He also noted that the bill exempting workers earning up to R$5,000 per month from income tax had not been considered in the Central Bank’s projections either.
*By Gabriel Shinohara, Alex Ribeiro, Estevão Taiarand Anaïs Fernandes — Brasília and São Paulo
Besides Brazilian auto parts shipped to the U.S. and used in Mexican car plants, automakers may redirect investments to American factories
03/28/2025
Import tariffs in the automotive industry, already in effect or under discussion by Donald Trump’s administration, are expected to impact Brazil as well. The United States and Mexico are the second- and third-largest export markets for Brazil’s auto parts industry, respectively. Together, they accounted for $2.29 billion in 2024, equivalent to 29.2% of the Brazilian sector’s total export revenue.
The 25% tariff imposed on vehicles imported by the U.S. is already having an effect, as Brazil supplies components to feed Mexico’s car assembly lines. With $923 million in shipments, Mexico represented 11.8% of Brazilian auto parts export revenue in 2024.
The situation is likely to worsen once the U.S. government defines tariffs for imported auto parts, as it has already signaled. If implemented, these new tariffs would make Brazilian parts more expensive in the American market.
In 2024, Brazil exported $1.37 billion worth of auto parts to the U.S., which accounted for 17.5% of the industry’s export revenue that year. The U.S. ranked behind only Argentina, which generated 34.6% of Brazil’s auto parts export income.
The sector is bracing for further bad news. In a statement, the National Association of Auto Parts Manufacturers (SINDIPEÇAS) said it views the measures “with concern.” The organization noted that after tariffs on cars, “some auto parts will also face additional tariffs weeks later, with the possibility of more items being added to the initial list.” SINDIPEÇAS leadership said it is “awaiting the full details of the legislation to assess the potential impacts more thoroughly.”
The effects of the new tariffs on Brazil are not limited to the auto parts industry. Although vehicle plants in Brazil do not export to the U.S. — the world’s second-largest car market — the new measures are expected to have a significant financial impact on automakers, potentially affecting their investment capacity worldwide, including in Brazil.
Moreover, the need to change manufacturing strategies, increasing production in the U.S. as Mr. Trump intends, could also lead automakers to redirect more investment to American factories, reducing the flow of resources to other countries with strong auto industries, such as Brazil.
A senior executive at a major automaker operating in Brazil said there is no doubt the impact will be significant, especially on Mexico. Nearly 80% of vehicles produced in Mexican factories are destined for the U.S. In 2024, 2.8 million vehicles crossed the border — more than Brazil’s entire production of 2.54 million units that year.
Many vehicles manufactured in Mexico are designed to meet the preferences and purchasing power of U.S. consumers. They are therefore larger and more luxurious than models exported to Brazil. Under a free trade agreement, 10% of the vehicles imported by Brazil in 2024 came from Mexico.
With nearly 4 million vehicles produced in 2024, Mexico ranked as the world’s fifth-largest vehicle producer, behind China, the United States, Japan, and India. Brazil ranked eighth. Mexico is also the fifth-largest vehicle exporter in the world, trailing Germany, Japan, the U.S., and South Korea.
Brazilian steel
According to data from the Mexican Automotive Industry Association (AMIA), Mexico has 37 plants manufacturing vehicles, engines, and transmissions. Most belong to companies that also operate in the U.S. and Brazil, including American, European, and Asian firms, employing a total of 84,000 workers.
The industry’s concerns are not limited to potential tariffs on auto parts and the existing tariffs on vehicles. A few days ago, Márcio de Lima Leite, president of the National Association of Motor Vehicle Manufacturers (ANFAVEA), said he is also concerned about additional tariffs on Brazilian steel.
“Automakers can only be strong if every link in the chain is strong. A strong steel industry ensures higher volume and lower costs,” he said.
Some, however, remain optimistic. An industry analyst who asked not to be named believes there is still room for negotiation between automakers and the Trump administration. Under this scenario, automakers could commit to increasing production at U.S. plants in exchange for a government commitment to reduce or postpone the tariffs.
In early March, Mr. Trump agreed to delay tariffs on vehicles by one month after receiving a phone call that included the CEOs of General Motors, Ford, and Stellantis.
Minutes of last meeting show Monetary Policy Committee expects pass-through on industrialized goods of dollar’s recent appreciation against Brazilian real
03/25/2025
Minutes of the last meeting of the Monetary Policy Committee (COPOM) show Central Bank officials expects the recent appreciation of the dollar against the real to affect industrial prices in the coming months, and tat higher food prices could contaminate other sectors.
“Regarding industrialized goods, the recent exchange rate movement has pressured prices and margins, already reflected in wholesale price increases, suggesting further pass-through to retail prices in the coming months,” the document states.
COPOM also noted that “food prices remain elevated and are likely to spread to other prices in the medium term due to significant inertial mechanisms within the Brazilian economy.”
In terms of service prices, the committee observed that they exhibit greater inertia, staying above the level compatible with meeting the target, and “accelerated in the most recent observations within a context of a positive gap.”
Overall, the short-term inflation outlook remains challenging, according to the committee. “It was highlighted in the short-term analysis that, if the reference scenario projections materialize, the twelve-month accumulated inflation will remain above the upper limit of the target tolerance range for six consecutive months, starting from January this year,” the minutes read.
COPOM reiterated that, “with the June inflation this year, it would constitute a failure to meet the target under the new framework of the target regime.”
Last week, COPOM raised the benchmark interest rates to 14.25% from 13.25% per annum and indicated a forthcoming increase of a smaller magnitude.
In the minutes, COPOM emphasized its decision to communicate three key points during last week’s meeting: that the monetary tightening cycle is not yet over, that the next increase would be of a smaller magnitude, and to indicate only the direction of the next move.
“The Committee, in its communication, chose to combine three signals regarding the conduct of monetary policy, should the expected scenario be confirmed,” the minutes state.
“Firstly, it judged that, given the adverse scenario for inflation dynamics, it was appropriate to indicate that the cycle is not over,” it continues.
“Secondly, due to the inherent lags in the ongoing monetary cycle, the Committee also deemed it appropriate to communicate that the next move would be of a smaller magnitude.”
Finally, it states that “furthermore, given the high uncertainty, it opted to indicate only the direction of the next move.”
In the minutes, COPOM also highlighted that a scenario of unanchored expectations for longer terms makes the inflation convergence scenario more challenging, which “requires greater monetary restraint for a longer period than would have been appropriate otherwise.”
According to the minutes, “the inflation convergence scenario becomes more challenging with unanchored expectations for longer terms and requires greater monetary restraint for a longer period than would have been appropriate otherwise.”
In the document, the committee also noted that inflation expectations measured by different instruments and collected from various groups of agents continued to rise “across all terms” and indicate additional unanchoring. According to the committee, this scenario makes the inflation outlook “more adverse.”
“The unanchoring of inflation expectations is a common concern among all committee members and must be addressed. It was emphasized that environments with unanchored expectations increase the cost of disinflation in terms of economic activity,” the document describes. “Looking ahead, the Committee will monitor the pace of economic activity, fundamental in determining inflation, particularly service inflation; the exchange rate pass-through to inflation, following a period of greater exchange rate volatility; and inflation expectations, which have shown additional unanchoring and are determinants for future inflation behavior,” it continued.
“It was emphasized that inflationary pressures remain adverse, such as the positive output gap, higher current inflation, and more unanchored inflation expectations,” COPOM also wrote.
The COPOM minutes also highlighted that data from recent months indicate signs of an “incipient moderation of growth,” but stressed that caution should still be exercised in drawing conclusions about economic activity.
In the document, COPOM pointed out that the baseline scenario involves an economic activity slowdown and that this movement is part of the transmission process of interest rate hikes and “a necessary element for inflation convergence to the target.”
“The Committee will continue to monitor economic activity and emphasizes that cooling aggregate demand is an essential element of the process of rebalancing supply and demand in the economy and convergence of inflation to the target,” it highlighted in the minutes.
Thus, the committee emphasized that these signs of incipient moderation align with its baseline scenario and further reinforced “that some more recent indicators, such as services, industry, or employed population, have indicated growth moderation after extraordinary resilience in the labor market and economic activity.”
COPOM then highlighted that the seasonally adjusted GDP grew by 0.2% in the last quarter of the previous year compared to growth of 1.3% in the second quarter and 0.7% in the third. “On the same comparative basis, on the side of aggregate demand, there was a reduction in household consumption after a sequence of thirteen consecutive increases,” the minutes highlighted.
In emphasizing the need for caution in conclusions about activity, the committee highlighted elements from the past, present, and future. In terms of the past, COPOM pointed out that the data are subject to revisions and seasonal effects. In the previous minutes from the January meeting, the committee noted that the data at the time were high-frequency and required caution in analysis due to seasonality and revisions.
For the present, the committee highlighted that there are “contemporary mixed data that are not unanimous in one direction.” For the future, COPOM highlighted that a “strong agricultural growth in the first quarter with possible repercussions for other sectors” is expected.
The minutes also addressed perception data, such as confidence indicators and credit sentiment surveys. COPOM highlighted that they suggest a greater slowdown than observed in objective data. “Moreover, the coincident objective data have shown mixed results depending on the sector or survey,” the document pointed out.
The committee also noted a marginal reduction in the employed population, but within a scenario of low unemployment and high earnings. “Even though recent data suggest some moderation, the labor market remains heated.”
*By Alex Ribeiro and Gabriel Shinohara, Valor — São Paulo and Brasília
The scale of income disparities became clearer through the research of French economist Thomas Piketty, using income tax data in his book “Capital in the Twenty-First Century,” which has helped draw more attention to the issue, according to Marcelo Neri, director of the Center for Social Policies at the Fundação Getulio Vargas (FGV Social).
Even among higher-income individuals, the idea seems more acceptable than in the past, according to tax experts. That is partly because the proposed 10% minimum effective tax rate on dividends is below the previously considered 20% rate.
However, greater attention in public debate does not guarantee changes in the country’s tax structure. Economists and lawyers foresee intense battles to modify and limit the proposal, not ruling out the possibility of a total standoff in Congress. Questions about the efficiency of public spending could add renewed pressure to these negotiations, they point out.
“Over the past decade, the way inequality is perceived has changed. With Piketty’s studies, we can better see income disparities and the top of the income distribution. The inequalities are even greater than anticipated,” Mr. Neri said.
In 2020, the taxation of large fortunes was included in the final document of the G20 Summit under Brazil’s presidency of the group. Luiza Nassif Pires, co-director of the Center for Research in Macro-Economics of Inequality (MADE/USP) and professor at the Institute of Economics at UNICAMP said the Brazilian government’s announcement focuses on a specific issue—alterations in income tax rather than overall wealth.
“This announcement involves a tax on income, slightly different from a tax on wealth. It makes sense domestically, doesn’t require global coordination, and aligns with what other countries are already doing. The proposal simply attempts to reverse the regressivity of Brazil’s tax system.”
The public debate is further reinforced by the support of liberals like former Central Bank president Arminio Fraga and contributions from individuals like Neca Setubal, heir to Itaú with a life dedicated to social causes, and Elie Horn, founder of Cyrela and one of two South American participants in Giving Pledge, a commitment to donate at least half of one’s fortune.
“The perception is that sentiment has changed. A year ago, a tax for high-income earners reaching Congress was unimaginable. Today, the idea seems more acceptable. However, many high-income individuals believe they are already taxed on these dividends. This sentiment will resonate in Congress, with lawmakers facing pressure,” says a tax attorney from a nationally operating firm.
Despite the broader debate on inequality and the celebration of the government’s proposal, Marcelo Neri admits he is “not particularly optimistic” about its progress through Congress and foresees “a long road ahead”:
“It is not a consensus agenda. Brazilian society has become accustomed to higher levels of inequality. The initial reaction was positive, but I don’t see it as an easy task. There is greater awareness of inequality, but the pendulum can swing when we look at the international landscape.”
Resistance in the legislative debate is also expected by Ms. Pires, given the history of easier approvals for tax deductions than for tax increases.
“Taxation should be understood as part of a social pact and not just as a tax burden. Decisions not to pay taxes have very high costs as well,” she pointed out, emphasizing the importance of maintaining the government’s revenue-generating capacity and the social commitments established by the Brazilian Constitution, such as public education and healthcare.
Research by MADE/USP reveals income tax exemption for those earning up to R$5,000 is unlikely to affect inequality because it targets a segment of the population not at the bottom of the income pyramid. Under the 2025 Income Tax table, these individuals would have a monthly income of up to R$2,824.
“A large portion of the population falls within the income range of two times the minimum wage and is exempt from income tax. The current measure targets the middle of the income range. Therefore, to have an impact on inequality, it must be paired with high-income taxation,” says the co-director of MADE/USP.
Visiting professor at FGV Law Rio, tax attorney Gabriel Quintanilha questions the choice of the R$50,000 per month threshold to define the high-income population. With an exemption for those earning up to R$5,000, he sees a small gap between the two income levels.
Moreover, he argues that the government’s proposal is “a small patch” in a tax system that requires a comprehensive update. “I’m not against taxing high incomes, but a broader reform of income taxation, for both corporations and individuals, should be discussed.”
Gustavo Carmona, leader of international taxes at EY Brasil, perceives a lack of clarity in areas such as non-resident investors: “There is an expectation of credit between what has been withheld and the 34% rate, but it doesn’t specify how this credit will be constituted. Non-resident investors cannot file a compensation report.”
Eldorado is controlled by the Batista family’s J&F, who claim the contract signed with Paper expired in 2018; courts have already recognized its validity
03/20/2025
According to decision, Paper Excellence is prohibited from vetoing any potential expansion project for Eldorado — Photo: Divulgação
The Tribunal of the Administrative Council for Economic Defense (CADE) has narrowed the scope of the provisional remedy imposed by the antitrust watchdog’s General Superintendency, thus restoring certain shareholder rights to Paper Excellence in the pulp producer Eldorado, owned by J&F Investimentos.
In an ongoing legal battle, the members of the tribunal decided on Wednesday (19), by a vote of 6 to 1, that there were grounds to maintain the provisional remedy while limiting its reach: Paper Excellence is prohibited from vetoing any potential expansion project for Eldorado, a contentious issue in the legal dispute that has dragged on for more than six years.
Since last year, as Valor has reported, both J&F, the holding company owned by the Batista family, and Paper, owned by Indonesian businessman Jackson Wijaya, have been in talks with the Mato Grosso do Sul state government regarding the potential construction of a second production line for Eldorado or an independent facility in the state.
With estimated investments at R$25 billion, the expansion project for Eldorado has been in the pipeline for nearly a decade but was stalled due to shareholder disagreements. Both partners have publicly expressed interest in the expansion, although initially, Paper linked the project’s execution to taking control of the pulp producer by performing the purchase and sale agreement signed in 2017.
Valor found that no expansion project has been submitted to Eldorado’s board of directors so far to initiate the investment. People close to the company say Paper’s indication that it would veto the project has derailed the plan.
“Paper Excellence asserts that it has always supported the factory’s expansion. However, the company emphasizes that it has been demanding that J&F provide economic and financial feasibility studies, as is customary for major investments in the pulp sector,” Paper stated in a note on Wednesday (19).
Eldorado and J&F have not commented when reached for their input.
Through a provisional remedy in December, the antitrust regulator’s General Superintendency barred Paper from voting in general meetings and participating in company decisions after accepting a request from Eldorado, which accuses the minority shareholder of engaging in eight alleged anticompetitive practices.
Rapporteur Victor Fernandes stated in his vote that CADE is competent to analyze the dispute, even though it involves corporate aspects. According to Mr. Fernandes, corporate law is related to antitrust law, which examines the repercussions of business decisions.
He noted, that there is “jurisdictional complementarity” between the antitrust regulator’s analyses and those of the Securities and Exchange Commission of Brazil (CVM) concerning this dispute. The capital market regulator, he pointed out, has already recognized CADE’s competence to analyze the matter from an antitrust perspective.
He suggested that the provisional remedy should only apply to the veto rights that Paper holds over investments in Eldorado. According to the rapporteur, these powers could be hindering the company’s investments.
All political rights remain in effect, including the appointment of board members and other officials appointed pursuant to the bylaws. The rapporteur was joined by members Diogo Thomson, Camila Alves, José Levi, Gustavo Augusto, and President Alexandre Cordeiro.
“I believe that it is particularly fair and proportional to restrict the effects of the provisional remedy solely to the veto powers invoked by the appellant [Paper] in its warning expressions sent to Eldorado regarding the Expansion Project,” the rapporteur noted in his vote.
The only dissenting vote came from member Carlos Jaques. According to him, corporate rights could cause competitive harm to Eldorado. Therefore, he also opted to maintain the corporate restrictions in his vote.
Beyond the specific case’s effects, the antitrust community was watching the process to discern signals from the current CADE tribunal. This is the main case reviewed by the current CADE members—four of whom were appointed in 2023 during the Lula administration.
Additionally, companies and lawyers were monitoring whether a faction of the tribunal would have the strength to overturn or mitigate a provisional remedy imposed by the technical department.
The main uncertainty for the session was the vote of member José Levi. According to him, no competition issue in the case would justify overturning the provisional remedy entirely. “However, to form a majority with the rapporteur’s vote and for legal safety, I adhere to the rapporteur’s proposal for partial provision,” Mr. Levi explained in the vote that formed the majority.
The case had undergone several legal developments before reaching the antitrust watchdog’s Tribunal on Wednesday (19). In January, the Federal Regional Court of the 3rd Region (TRF-3) overturned the General Superintendency’s provisional remedy. It reinstated Paper’s corporate rights in the pulp producer until the antitrust regulator’s final judgment of the remedy, which occurred on Wednesday (19).
Eldorado is owned by J&F, the Batista family’s holding company, which argues that the purchase and sale contract signed with Paper in September 2017 expired in 2018—although the courts have recognized its validity. The Batista family is seeking to annul an arbitral award that ruled in Paper’s favor, ensuring the transfer of Eldorado’s control.
*By Guilherme Pimenta and Stella Fontes, Valor — Brasília
The 100-basis-point hike announced Wednesday marks the fifth consecutive increase, pushing the benchmark interest rate to its highest level since 2016
03/20/2025
As expected, the Central Bank’s Monetary Policy Committee (COPOM) raised the benchmark Selic interest rate from 13.25% to 14.25%. The key question now is what comes next. On this front, the committee indicated that, if the expected scenario is confirmed, the adjustment at the May meeting will be of a “smaller magnitude.”
The unanimous decision marks the fifth hike in the monetary tightening that began in September 2024, bringing the Selic to its highest level since October 2016, during the Michel Temer administration. This move also signaled the end of the forward guidance introduced in December when the Central Bank raised rates by 100 basis points and indicated two more hikes of the same size in January and March.
The COPOM justified this week’s decision by pointing to a “challenging scenario” for inflation convergence. “Given the persistent adverse conditions for inflation convergence, the high level of uncertainty, and the inherent lags in the ongoing tightening cycle, the committee anticipates, if the expected scenario is confirmed, a smaller adjustment at the next meeting,” it said.
The committee refrained from making commitments beyond May, saying only that the total magnitude of the tightening cycle will be guided by its “firm commitment” to bringing inflation back to target. Future decisions will depend on inflation dynamics, forecasts, expectations, the output gap (a measure of economic slack), and the overall risk balance.
The assessment that inflation risks remain skewed to the upside was maintained. The statement also reiterated that market perceptions regarding fiscal policy continue to have a “significant impact” on asset prices and expectations.
Inflation forecasts
However, the COPOM slightly lowered its inflation forecasts for 2025, from 5.2% to 5.1%, and for the relevant monetary policy horizon—now the third quarter of 2026—from 4% to 3.9%. The inflation target is 3%, with a tolerance band of 150 basis points in either direction.
“The latest scenario is marked by further de-anchoring of inflation expectations, high inflation projections, resilient economic activity, and labor market pressures, all of which require a more contractionary monetary policy,” the committee said.
Regarding economic activity and the labor market, the COPOM maintained its previous assessment that indicators remain strong but noted this time that growth is showing “early signs of moderation.”
In its January meeting minutes, the COPOM had already mentioned “incipient” signs of “some moderation” in growth but cautioned that the data was high-frequency and required careful interpretation. This view was later echoed by Central Bank Chair Gabriel Galípolo and Economic Policy Director Diogo Guillen in public statements.
The Central Bank’s Economic Activity Index (IBC-Br), a GDP proxy, rose 0.89% in January from December, exceeding market expectations. However, in December 2024, the index had shown a 0.60% drop compared to November.
Regarding the external environment, the COPOM highlighted that global conditions remain “challenging,” particularly due to economic policies in the United States, and pointed to uncertainties surrounding U.S. trade policy and its potential effects.
Following the decision, Finance Minister Fernando Haddad attributed the rate hike to the guidance issued at the end of 2024. “The Central Bank president said the guidance would be followed,” he said.
On the same day, the Federal Reserve kept its benchmark interest rate unchanged in the 4.25%-4.50% range. After the decision, Fed Chair Jerome Powell said that a significant portion of this year’s inflation is expected to come from trade tariffs imposed by President Donald Trump. However, he noted that it is still too early to determine the full impact.
*By Gabriel Shinohara and Alex Ribeiro, Valor — Brasília and São Paulo
Farmers struggle with long wait times amid record harvest and logistical bottlenecks
03/18/2025
In a year of record grain production and a concentrated soybean harvest driven by weather conditions, producers are struggling to transport their crops through the port of Porto Velho, the capital city of northern Rondônia state. From there, the soybeans are shipped via the Madeira River to the port of Santarém (Pará state) for export.
This month alone, the queue of trucks waiting at support stations along the BR-364 highway to unload soybeans at transshipment stations has surpassed 1,100 vehicles. The daily loading capacity at Porto Velho’s port is 10,000 tonnes, or approximately 200 trucks.
With no space to deposit their cargo at unloading stations, trucks are parking at the Mirian network support post in Candeias do Jamari, in Rondônia. As of Monday (17), trucks were already lining up along the roadside because the parking lot at the support post was full, according to soybean producers in Rondônia.
“The average wait time to unload is between four and six days. One or two days is expected for this period, but five days is excessive. It’s a tough situation. Some producers are even losing grain in the fields because they can’t store it in warehouses,” said Marcelo Lucas da Silva, director of the Association of Soybean and Corn Producers of Rondônia (Aprosoja RO).
Sources connected to trading companies, who wished to remain anonymous, indicated that such long queues are common during the peak of the harvest season. Cargill and Amaggi are the primary grain traders shipping soybeans through Porto Velho.
The National Supply Company (CONAB) estimates that Brazil’s 2024/25 soybean crop will reach a record 167.4 million tonnes, reflecting a 13.3% increase. In Rondônia, CONAB projects a 7.1% increase to 2.4 million tonnes, while APROSOJA estimates a 12% increase.
Porto Velho’s terminal handles not only Rondônia’s production but also shipments from northwestern and northern Mato Grosso. Mr. Silva claimed that Amaggi, which operates the private Portuchuelo terminal in Porto Velho, is prioritizing its own fleet of trucks, leaving independent producers in Rondônia waiting longer. “There isn’t a single queue; they prioritize their own trucks,” he said.
In a statement, Amaggi said that “the scheduling of truck arrivals from Mato Grosso and Rondônia at its two Porto Velho port units follows a pre-established company plan.” The company also said that it is adjusting its operations to accommodate greater grain volumes, which have risen due to delayed harvesting in Rondônia caused by adverse weather conditions. Amaggi acknowledged that this may lead to “some delays” but emphasized that the situation “should not significantly impact grain exports through this corridor.”
Rondônia state legislator Ezequiel Neiva raised concerns in the Legislative Assembly, alleging that Hermasa—Amaggi’s subsidiary operating at Porto Velho’s port—has an annual capacity of 2.4 million tonnes but is only utilizing 30% of it. Mr. Neiva called for the Rondônia Ports and Waterways Authority (SOPH) to appear before the legislature to address the issue.
Last week, APROSOJA Rondônia sent a formal request to SOPH president Fernando Parente, urging the agency to open the port to more operators willing to invest and expand shipping capacity.
Mr. Parente said that the state government plans to initiate a bidding process by Friday (21) to attract new companies to the port. “We have a 22,000-square-meter area that could accommodate new silos,” he noted.
He also mentioned that the anticipated concession of the Madeira River waterway this year should enhance regional waterborne transport. A public consultation on the project, coordinated by the National Waterway Transport Agency (ANTAQ), is scheduled for the 20th. Mr. Parente expects these developments to bolster port operations by 2026.
In the short term, Mr. Parente anticipates that the backlog will ease with the arrival of a large Bertolini Transporte e Navegação convoy on Thursday, consisting of 20 barges set to transport 50,000 tonnes of soybeans to Santarém—equivalent to 1,000 trucks.
According to Mr. Parente, an average of 170 trucks arrive daily at the port, which has a capacity of 200 trucks per day or 10,000 tonne. “The cargo arrives damp and needs to be dried in silos. We have four silos, each with a 10,000-tonne capacity. Three are full, and the fourth is being loaded,” he said.
He acknowledged logistical challenges due to Amaggi’s operations, which bring in around 110 trucks daily to the company’s private drying facilities. “There is indeed a logistical bottleneck,” Mr. Parente said.
*By Cibelle Bouças e Rafael Walendorff, Globo Rural — Belo Horizonte and Brasília
High interest rates expected to sustain wave of corporate restructurings
03/18/2025
More than 20 publicly traded companies in Brazil are currently undergoing bankruptcy protection or out-of-court restructuring, a figure that is likely to rise in 2025 as more firms struggle to meet their debt obligations amid persistently high interest rates. Experts consulted by Valor anticipate yet another record year for corporate financial distress in the country.
Recent cases include consumer goods company Bombril and agribusiness group Agrogalaxy, while notable ongoing proceedings involve telecom group Oi, which has filed for bankruptcy protection for the second time, and retailer Americanas, which sought court protection after the disclosure of a multi-billion-real accounting fraud. Publicly listed companies tend to stand out in these proceedings due to the scale of their debts—some among the largest in the country—and because regulatory requirements mandate financial disclosures, shedding more light on their challenges. This transparency also offers insight into the situation of smaller firms, which often face even greater financial distress.
A Valor Data analysis of 52 companies in Brazil’s benchmark Ibovespa stock index that have reported 2024 results shows that average leverage increased from 1.47 times to 1.64 times.
Fabiana Solano, a partner at law firm Felsberg Advogados, warned that the financial crisis is worsening even for larger companies. “Persistently high interest rates and global instability are having an immediate impact on businesses,” she said. While smaller firms are in a more fragile position, she noted that even listed companies face significant debt burdens. “For them, this is a moment for caution and vigilance.”
Among the publicly traded firms in distress is shipbuilding and offshore services company OSX, controlled by Eike Batista, which, like Oi, has filed for bankruptcy protection for a second time. Energy company Light has been under restructuring since 2023. Meanwhile, textile manufacturer Teka, which has been under bankruptcy protection for over a decade, recently had its liquidation order confirmed.
The number of filings would be even higher if not for companies that managed to restructure their debts through bilateral negotiations, such as airline Azul and e-commerce solutions provider Infracommerce. Wind blade manufacturer Aeris and Viveo, a healthcare distributor backed by the Bueno family (owners of diagnostic services provider Dasa), are also negotiating with creditors to avoid more drastic measures.
While listed companies typically have broader access to credit—both through bank loans and capital markets—the equity market remains frozen, reflecting investor aversion to stocks and capital outflows from equity funds. The only expected stock offering in four months is from insurance company Caixa Seguridade, a transaction motivated solely by the need to comply with B3’s liquidity requirements.
Regulatory and market implications
Under current rules, publicly traded companies undergoing bankruptcy protection are excluded from B3’s theoretical indexes but can still have their shares traded. This rule was introduced over a decade ago following the collapse of the X Group, which had several of the most liquid stocks on the exchange at the time.
Roberto Zarour, a restructuring partner at law firm Lefosse Advogados, pointed out that, unlike privately held firms, listed companies must follow strict disclosure requirements, keeping investors informed through material fact statements and market announcements. The challenge, he said, is balancing transparency with the confidentiality required in sensitive negotiations.
Marcelo Ricupero, a restructuring partner at law firm Mattos Filho Advogados, noted that the rising number of cases among listed companies underscores the widespread nature of the crisis. “No company is immune to the current turbulence. The trend is for more cases to emerge,” he said.
Mr. Zarour from Lefosse added that debt restructuring among publicly traded companies—typically more governed and with better credit access—highlights the deeper struggles of smaller firms. Many took on debt when interest rates were low but are now struggling to cope with the cost of borrowing in a high-rate environment.
Laura Bumachar, a partner at Dias Carneiro Advogados, pointed out that many companies have accumulated debt over the years and are now feeling the strain. “I believe 2026 will be even worse. Many companies are barely managing to keep up. A new wave of filings is coming,” she warned. Her firm has recently seen a surge in cases, not only for bankruptcy protection and out-of-court restructuring but also for outright bankruptcy.
According to Ms. Solano of Felsberg Advogados, one expected consequence of the crisis will be greater market concentration. Stronger companies with capital will seek mergers and acquisitions as financially weaker firms shrink or collapse. Mr. Ricupero from Mattos Filho noted that distressed M&A activity is on the rise.
When contacted, Light said it approved its restructuring plan in May 2024. “In a sign of confidence in the company’s future, creditor demand to convert debt into equity was 50% higher than the plan’s set limit,” it noted. The company added that all restructuring steps have been carried out as planned.
Azul reiterated its January statement upon concluding creditor negotiations, highlighting that the agreements will improve cash flow over the next three years and result in a pro forma deleveraging of approximately 1.4 times based on third-quarter 2024 figures.
Aeris said its financial negotiations are publicly known and have been disclosed through market announcements. The company emphasized that these negotiations “do not involve discussions or requests related to bankruptcy protection.”
Viveo reported that between late 2024 and early 2025, it successfully renegotiated and adjusted the covenant schedule of its debt with creditors.
Teka said that the decision to liquidate while maintaining operations “ensures that the company continues to function, removing uncertainty about its future and reaffirming its commitment to business continuity.” The company acknowledged that shareholders may resist the move, as they will be the most negatively affected due to the loss of equity value and control. However, it emphasized that its priority is to keep operations running, protect jobs, and maximize creditor repayments. The ruling also strengthens the company’s asset value, potentially attracting investors.
Infracommerce said that, in agreement with financial institutions and new investors, it has launched a restructuring plan to adjust its capital structure and secure new funding sources for its transformation. The company stressed that this plan is being implemented outside the scope of bankruptcy protection.
Agrogalaxy, Americanas, Oi, and OSX declined to comment, while Bombril did not respond.
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