Petrobras weighs offshore LNG exports as gas market reforms advance

Oil giant studies offshore liquefied natural gas facilities as proposed gas market reforms could require it to sell part of domestic output to rivals

 

 

 

Petrobras will begin studying the feasibility of investing in offshore liquefied natural gas (LNG) facilities to export part of Brazil’s natural gas production, according to sources familiar with the matter.

The move comes amid discussions over the Gas Release program, provided for under Brazil’s New Gas Law, which aims to expand private companies’ access to the natural gas market. The initiative, which still requires regulation by the National Agency of Petroleum, Natural Gas and Biofuels (ANP), would require a dominant market player to sell part of its natural gas production to competitors in an effort to increase competition. The proposal is on the agenda for the agency’s next board meeting on Friday (7).

If those restrictions on Petrobras’s market position are adopted, the oil giant is considering directing investments abroad. “As the Gas Release program is currently designed, it does not create a single additional molecule of gas. It simply shifts market share from the state-owned company to private players,” a source close to Petrobras told Valor.

Petrobras announced on Monday (3) its third natural gas discovery in Colombia. If all three discoveries produce the expected volumes, the Brazilian company’s Colombian output will be comparable to production from the main phase of the Sergipe Deepwater Project (SEAP) in Brazil’s Sergipe-Alagoas Basin.

The project in northeastern Brazil is considered key to expanding Petrobras’s gas production. It includes two offshore platforms and a 134-kilometer gas pipeline. SEAP I will have the capacity to process 10 million cubic meters of natural gas per day, while SEAP II is expected to process up to 12 million cubic meters per day.

Petrobras’s Colombian operations do not currently include plans to export gas, although that remains a future possibility. Bringing Colombian gas to Brazil, however, would require Brazil’s regulatory framework to remain unchanged, the source said. Combined, the three discoveries could supply Colombia’s domestic market for 10 years, ensuring the country’s self-sufficiency in natural gas. Petrobras has operated in Colombia for 39 years and is the operator of the GUA-OFF-0 Block consortium, holding a 44.44% stake alongside Colombia’s state-owned Ecopetrol, which holds the remaining 55.56%.

The project is expected to require investments of $1.2 billion during the exploration phase and $2.9 billion for field development. Production is projected at 13 million cubic meters of natural gas per day over 10 years. First gas is expected in 2030, subject to the issuance of all required permits and licenses.

The latest discovery, announced Monday (3), was made at the Sandia-1 exploratory well, located in the same block as the previous two discoveries. Drilling began on June 12 and reached its final depth on June 29, confirming the presence of hydrocarbons. The well is located 42 kilometers off Colombia’s coast in ultradeep waters with a water depth of 1,251 meters.

Petrobras’s expansion in Colombia’s natural gas market has been supported by regulatory reforms in that country aimed at strengthening domestic supply and reducing the risk of shortages. Among the changes was the introduction of long-term firm gas sales contracts, which made the project economically viable.

According to the source, the latest discovery also strengthens Latin American energy integration, which could enter a new phase if Colombian gas is eventually exported. Petrobras already imports natural gas from Bolivia through the Brazil-Bolivia Gas Pipeline (Gasbol) and from Argentina.

*By Kariny Leal — Rio de Janeiro

Source: Valor International

https://valorinternational.globo.com/

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Havanna’s Brazil operator joins group in out-of-court recovery

Café del Plata claims companies operate in an integrated manner, share guarantees, have common control, and maintain financial relationship among themselves

 

 

 

Alfajores from the Argentine company Havanna — Foto: Facebook Havanna
Alfajores from the Argentine company Havanna — Photo: Facebook Havanna

Café del Plata, responsible for operating Argentina’s Havanna chain in Brazil, is part of a group of companies that has requested a São Paulo court to approve an out-of-court restructuring plan to renegotiate R$127 million in debts with financial creditors. The move adds to the growing list of companies turning to the courts to tackle financial difficulties.

According to documents obtained by Valor, the request also includes Aeger Comercial e Importadora, Casma do Brasil, Delfos Comércio de Perfumes e Cosméticos, DGA Doces del Plata Administradora de Franquias, and Fly Shopping Comércio de Perfumes, Alimentos e Artigos de Presente.

The petition explains that the companies operate in an integrated manner, share guarantees, have common control, and maintain financial relationships among themselves. Hence, they advocate for a joint restructuring.

When reached for comment, Havanna Brasil stated that the process arises from “obligations contracted by other companies within the shareholder group of Havanna, unrelated to operational or financial issues” of the network. However, it emphasized that the company is jointly liable for the group’s debts. According to the company, the out-of-court restructuring aims to prevent these obligations from affecting its operational capacity and its commitments to suppliers, franchisees, and partners.

This joint liability means, in practice, that the food operation is responsible for debts incurred by companies in other segments of a group that has been active for over 30 years in cosmetics, perfumery, personal hygiene, and food.

In the petition, the companies claim that Café del Plata is not facing an economic or financial crisis on its own. They maintain that its activities “are continuously growing and gaining more space in the Brazilian market.”

However, the company was included because its operations and guarantees are said to be interconnected with those of the other companies. According to the request, its exclusion “would render the complete restructuring of the activity unfeasible.”

This claim of growth contrasts with the scenario described by the company itself to Valor in an interview before the process became public. Havanna Brasil postponed its target of reaching 500 stores in the country from 2026 to 2028 and reduced its revenue projection for this year from R$500 million to R$450 million. The R$500 million mark is now expected in 2027.

At the time, Adriana Villela, co-founder and growth director of Havanna Brasil, attributed the revision to the retail sector’s performance and the greater caution of franchisees.

“This year we had to survive. I would like to invest more, but it’s impossible,” she told Valor then. Villela also mentioned the holiday calendar, which reduced foot traffic in shopping malls, and investors’ caution due to the FIFA World Cup and elections.

Villela identified occupancy cost as the main challenge for the operation. “The biggest problem today is rent. The occupancy cost has become very high,” she said. According to her, the billing model of the enterprises needs to keep up with the changes in retail.

The diagnosis aligns with the one presented to the court. While explaining the financial deterioration of the other companies, the group states that more than 90% of its sales points are in shopping centers, a segment that has experienced a flow reduction in recent years. At Havanna, the concentration is even greater: nearly 97% of the 250 units are located in such establishments.

The petition also cites the effects of the pandemic, which led to increased indebtedness to finance operations and support clients and franchisees. Subsequently, defaults and rising interest rates increased cash flow pressure.

According to the companies, a significant portion of the debts was contracted when the Selic policy rate was below 3%. The subsequent cycle of monetary tightening, with interest rates above 12%, raised financial expenses.

Havanna’s expansion in Brazil is almost entirely through franchises. Of the 250 units, only three are company-owned and function as training stores.

In the first half of the year, the network sold 163 new franchises, although some are still awaiting approvals in shopping malls and airports. In the same period, according to the company, more than 30 operations were opened.

Investments range from R$180,000 in the Express model, of 8-square-meter stores, to over R$500,000 in cafes and hybrid units. Ice cream parlors require investments starting at R$400,000. The average return period reported by the company is 18 to 24 months.

When asked about the debt amount attributable to Café del Plata, the communication of the process to franchisees, and the Argentine headquarters’ knowledge, the company did not respond.

In a statement sent to Valor, the chain declared that the business “is in strong expansion” and maintains the plan to reach more than 700 points of sale in different formats by 2030 in Brazil. This target differs from the one previously presented to Valor, which aimed for 500 stores by 2028.

The company also intends to expand product categories with dulce de leche and advance the brand’s distribution in the food retail sector.

The Brazilian operation will celebrate its 20th anniversary in 2026 and is the largest Havanna network worldwide in terms of store numbers. It is also used by the headquarters as a format laboratory. Of the 250 units, 90 are of the “heladeria” or hybrid model, combining cafe and ice cream parlor.

*By Fernanda Guimarães and Vitória Nascimento — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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Anulação de acordo trabalhista exige prova de vício na manifestação de vontade

A Subseção II Especializada em Dissídios Individuais (SDI-2) do Tribunal Superior do Trabalho rejeitou a pretensão de um motorista de Osasco (SP) que pretendia anular uma decisão que homologou um acordo firmado por ele e por uma empresa de transporte de cargas. O autor afirmava que sua assinatura havia sido falsificada, mas não apresentou provas de sua alegação.
Magnific
Sem prova de falsificação de assinatura, TST manteve acordo contestado por motorista

 

 

 

 

 

 

 

 

O motorista ajuizou a ação trabalhista em março de 2013, com pedido de horas extras, e o Tribunal Regional do Trabalho da 15ª Região (interior de São Paulo) reconheceu a jornada das 5h às 22h. Na sequência, ainda dentro do prazo para interposição de recurso ao TST, foi firmado acordo entre as partes, com a participação do advogado do motorista, que tinha poderes para negociar. O ajuste, homologado pela vice-presidência do TRT, previa o pagamento de R$ 30 mil em nove parcelas, a serem depositadas na conta do advogado.

Poderes específicos

Meses depois, ao buscar informações sobre o processo, o motorista afirmou ter tomado conhecimento do acordo. Já representado por outro advogado, ajuizou ação rescisória para anular a homologação do ajuste, sustentando que sua assinatura havia sido falsificada e que não havia recebido os valores. Ele pediu a juntada do documento original do acordo e uma perícia grafotécnica. Como o original não foi apresentado, a perícia não pôde ser feita.

Na contestação, a empresa argumentou que, embora o motorista não estivesse presente à formalização, ele foi regularmente representado por advogado com poderes nos autos, o que garantiria a validade do ato.

Ao julgar o caso, o TRT-15 concluiu que não havia provas de falsificação da assinatura nem de irregularidade no acordo. Segundo o tribunal, ao comparar a assinatura questionada com outras que estavam nos autos, não foram identificadas diferenças relevantes.

O ministro Douglas Alencar Rodrigues, relator do recurso, manteve o entendimento do TRT-15. Ele destacou que um acordo só pode ser anulado se houver prova de que uma das partes não concordou com ele livremente.

No entanto, o advogado tinha poderes específicos para negociar em nome do cliente. Assim, diante da alegação de falsidade, cabia ao motorista apresentar prova ou demonstrar eventual irregularidade na atuação do advogado. Para o ministro, a controvérsia diz respeito à conduta do advogado, e não à validade do acordo, que permanece eficaz.

“A procedência da ação rescisória com base no inciso VIII do art. 485 do CPC/73 depende da demonstração de que uma das partes não manifestou livremente a sua vontade, o que não se perfaz pela tentativa de demonstrar que o acordo celebrado e homologado lhe foi desfavorável, porquanto, nesse caso, o que se tem é o mero arrependimento com o resultado da transação”, concluiu o magistrado.

RO 5557-67.2016.5.15.0000

*Com informações da assessoria de imprensa do TST.

Seja o primeiro a comentar.

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Juíza valida contrato verbal e cliente pagará honorários a advogado

Magistrada entendeu que mensagens e pagamentos anteriores comprovaram a contratação dos serviços advocatícios.

 

 

4 de agosto de 2026

 

A Cliente deverá pagar a última parcela de honorários ajustados verbalmente com advogado. Assim decidiu a juíza de Direito Regina Aparecida Soares Ferreira, da 1ª vara Cível de Joinville/SC, ao considerar que mensagens e pagamentos anteriores comprovaram a contratação dos serviços.

No caso, o causídico afirmou ter sido contratado para prestar orientação jurídica e acompanhar providências relacionadas a um boletim de ocorrência envolvendo violência doméstica.

Os honorários foram fixados em R$ 2,5 mil, divididos em cinco parcelas de R$ 500. No curso do processo, o advogado reconheceu o pagamento de R$ 2 mil e limitou a cobrança aos R$ 500 restantes, correspondentes à última parcela inadimplida.

A cliente foi citada por WhatsApp, mas não apresentou contestação.

Embora tenha aplicado os efeitos da revelia, a magistrada ressaltou que a ausência de defesa não leva automaticamente à procedência da ação, sendo necessário examinar a consistência do pedido e as provas apresentadas.

(Imagem: Magnific)

Juíza reconheceu validade de contrato verbal e condenou cliente ao pagamento da última parcela dos honorários advocatícios.(Imagem: Magnific)

Contrato verbal

Ao examinar o caso, a juíza explicou que a legislação não exige contrato escrito para a validade da contratação de serviços advocatícios. O ajuste pode ser realizado verbalmente, desde que sua existência e seu conteúdo sejam demonstrados por outros meios de prova.

No processo, mensagens eletrônicas, documentos pessoais encaminhados ao advogado, procuração e registros do acompanhamento jurídico confirmaram a relação profissional.

A magistrada destacou, especialmente, o pagamento de quatro das cinco parcelas combinadas.

“O pagamento de R$ 2.000,00, correspondente a quatro parcelas sucessivas de R$ 500,00 cada, representa inequívoco reconhecimento da contratação e da obrigação assumida.”

Segundo a decisão, essa conduta seria incompatível com eventual alegação de inexistência do vínculo ou de discordância quanto ao valor dos honorários.

A juíza também considerou que a iniciativa do advogado de reconhecer espontaneamente os pagamentos não contabilizados e reduzir o valor cobrado demonstrou lealdade e boa-fé processual.

Assim, reconheceu a contratação verbal pelo valor total de R$ 2,5 mil e o pagamento parcial de R$ 2 mil.

A cliente foi condenada a pagar os R$ 500 restantes, com correção monetária e juros de mora.

Processo: 5028956-70.2026.8.24.0038

Como entende o STJ?

O STJ admite a validade de contratos verbais de honorários advocatícios, desde que a contratação e os termos do acordo sejam comprovados no processo.

Em 2023, a 3ª turma reconheceu que a prova testemunhal pode ser utilizada para demonstrar a contratação quando houver início de prova escrita. No caso, como não ficou comprovado o valor exato acertado entre as partes, os honorários foram fixados judicialmente.

Em julgamentos mais recentes, a Corte reforçou que a existência do contrato verbal não dispensa a demonstração do conteúdo da obrigação, especialmente quanto ao percentual ajustado, à ocorrência do êxito profissional e ao benefício econômico obtido pelo cliente.

Assim, embora o instrumento escrito seja a forma mais segura de formalizar a relação, a jurisprudência do STJ reconhece que acordos verbais podem produzir efeitos quando acompanhados de elementos suficientes para comprovar a contratação e as condições pactuadas.

Fonte: https://www.migalhas.com.br/quentes/461549/juiza-valida-contrato-verbal-e-cliente-pagara-honorarios-a-advogado

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Foreign groups rethink Brazil listings as buyouts gather pace

Santander’s offer for minority shareholders highlights broader shift as multinational parents seek full ownership of subsidiaries amid depressed valuations

 

 

 

 

Santander’s move to acquire the roughly 10% stake in its Brazilian subsidiary that it does not already own is the latest sign that foreign multinationals are rethinking the value of keeping their Brazilian operations listed on B3. Companies including Iberdrola—the parent of Neoenergia—, Portugal’s EDP, and France’s Carrefour have taken their local subsidiaries private in recent years. Valor learned that other multinationals are also evaluating takeover bids to acquire minority-held shares in their Brazilian subsidiaries.

The trend comes amid a backdrop of high interest rates, weak market liquidity, and a dearth of new equity offerings. After the wave of initial public offerings (IPOs) in 2020 and 2021, B3 has experienced a succession of take-private transactions, mergers and takeover bids, without enough new listings to offset the departures.

B3 data show the number of listed companies fell from 394 in 2022 to 344 as of the latest survey in June. A year ago, the exchange had 361 listed companies.

“For two consecutive years, I’ve been working on takeover bids,” said Jean Marcel Arakawa, a capital markets partner at law firm Mattos Filho. According to him, controlling shareholders and prospective buyers have identified a significant gap between companies’ share prices and their intrinsic value.

“What we’ve been seeing are situations where the controlling shareholder—or even another buyer—recognizes a discount between a company’s intrinsic value and its screen price, creating room for transactions. On top of that, it has become much harder to generate additional liquidity for these shares.”

A source at an investment bank told Valor that other foreign groups are studying transactions similar to Santander’s proposal. These assessments are at different stages and may not all result in formal offers. Still, they indicate that parent companies are reassessing whether it remains strategically worthwhile to keep their Brazilian subsidiaries publicly traded.

“That makes a lot of sense, especially if the parent company’s shares trade well in its home market,” said the source, who requested anonymity. “Broadly speaking, if the parent trades at a higher P/E multiple [price-to-earnings ratio] abroad, it’s a logical move.”

In practice, when a parent company commands a higher valuation multiple in its home market than its Brazilian subsidiary does locally, it can use its own shares as acquisition currency to buy the publicly traded minority stake at a relatively lower economic cost while capturing all of the subsidiary’s future value creation. Foreign-controlled companies still listed on B3 include Telefónica Brasil, TIM Brasil, and CPFL Energia—owned by China’s State Grid. State Grid has previously announced plans to list its Brazilian operations.

In Santander’s case, the Spanish bank intends to launch a voluntary exchange offer under which minority shareholders may swap their holdings for shares in the parent company. The transaction could reach approximately R$11 billion, representing a 15% premium over the reference market price. Before the announcement, Santander Brasil units had fallen about 21% this year on B3.

The transaction does not currently constitute a take-private deal. The offer is not subject to a minimum acceptance threshold, and shareholders may choose to remain invested. Santander said it intends to keep the Brazilian subsidiary listed on B3.

A high acceptance rate, however, would significantly reduce the free float and could make a future delisting proposal easier should the parent company decide to pursue one. According to people familiar with the transaction, no such decision has been made, although market participants consider a delisting a possibility after the offer is completed.

Beyond Santander’s specific case, the move reflects a broader shift in how multinational companies view maintaining Brazilian subsidiaries on the stock exchange. For years, a local listing provided access to Brazilian investors, funding for expansion, acquisition currency, and an independent market valuation for local operations.

That rationale has weakened as Brazilian shares have traded at what many consider steep discounts and liquidity has deteriorated. With little prospect of new equity offerings, some parent companies have concluded it makes more sense to acquire minority interests and fully capture the value generated by their subsidiaries, according to a market source.

Spain’s Iberdrola was among the latest to follow that strategy. After purchasing retirement fund Previ’s 30.29% stake in Neoenergia, it launched a takeover bid for the remaining shares, raising its ownership to about 98% of the company and paving the way for its delisting from B3.

The transaction did not reduce Brazil’s strategic importance for the group. Neoenergia remains one of Iberdrola’s main international platforms, but concentrated ownership has given the parent company greater flexibility over investment decisions and corporate strategy.

Portugal’s EDP took its Brazilian subsidiary private in 2023, saying at the time that simplifying its corporate structure was part of its strategy for what it considered a priority market. In the retail sector, Carrefour acquired the remaining shares of its Brazilian operation in 2025 and became its sole shareholder, likewise emphasizing Brazil’s strategic importance to the group. In that case, the transaction was not carried out through a formal takeover bid.

The trend has also reached Brazilian groups. Last week, Randoncorp’s controlling shareholder launched a voluntary tender offer to acquire shares in the commercial vehicle equipment manufacturer, offering shares in its subsidiary Fras-le in exchange—a structure similar to Santander’s—as part of a corporate reorganization. Although the controlling shareholder is Brazilian, the transaction reinforces the broader trend toward simpler ownership structures, supported by the fact that the parent company trades at a significantly lower valuation than its subsidiary.

Other transactions have had a similar effect on Brazil’s stock market through different mechanisms. After acquiring control of Brazilian companies, shipping groups CMA CGM and MSC opted to delist Santos Brasil and Wilson Sons, respectively, choosing to operate the assets as privately held businesses.

Despite differences among the transactions, all have reduced the universe of publicly traded companies available to Brazilian investors, at a time when the market has seen virtually no new IPOs.

Henrique Filizzola, a capital markets partner at law firm Stocche Forbes Advogados, said the trend reflects a combination of strategic considerations, macroeconomic conditions, and characteristics of Brazil’s capital markets. “In many cases, the persistent discount between share prices and the intrinsic value of the underlying assets, combined with weak market liquidity, reduces the advantages of remaining publicly listed,” he said.

He also pointed to the cost of capital and the expenses associated with maintaining a listed company. “On top of that, a high-interest-rate environment increases the cost of capital and makes capital markets a less competitive source of financing, while the regulatory and corporate governance costs associated with being a publicly traded company remain high,” he said.

In his view, the trend does not reflect a loss of confidence in Brazil but rather a reassessment of the most efficient ownership structure for capital allocation and business management. The growing number of these transactions, he said, underscores the need to improve market liquidity, broaden the investor base and strengthen the Brazilian market’s ability to properly value high-quality companies.

Contacted by Valor, Santander reiterated a statement released last week saying, among other points, that the transaction “reflects Banco Santander’s confidence in Brazil and in the growth potential of its businesses in the country.” The other companies mentioned in this article declined to comment.

*By Fernanda Guimarães — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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Central Bank expected to cut rates to 14%, leave door open to more easing

Inflation and economic activity data support another quarter-point cut, with policymakers expected to lower benchmark rate for a fourth consecutive meeting

 

 

 

 

The latest round of economic activity and inflation data has strengthened market confidence that the monetary easing cycle will continue, with expectations for another quarter-point cut—bringing the Selic, Brazil’s benchmark interest rate, to 14%—virtually unanimous among the 113 banks, asset managers and consultancies surveyed by Valor.

In addition to collecting forecasts, Valor interviewed economists from institutions that ranked among the Top 5 in the Central Bank’s most recent Focus survey for short-term Selic projections, covering the second quarter. While the prevailing view is that recent data and the Monetary Policy Committee’s (Copom) communication point to another cut at next Wednesday’s meeting, there’s less conviction about how long the easing cycle will last, given risks stemming from both the domestic and external outlook.

Of the 113 institutions that shared their expectations, only three don’t expect a 25-basis-point cut this week: Citi, Pantheon Macroeconomics, and Suno Research. Beyond August, 46 expect the easing cycle to end either at next month’s meeting or immediately after this week’s, while 64 expect at least one additional cut between September and December.

Barclays chief economist for Brazil Roberto Secemski has for some time expected a 25-basis-point reduction this week and believes developments in economic variables since the June meeting have reinforced that call. In his view, the Central Bank already signaled a preference for continuing the easing cycle in June by extending the relevant policy horizon earlier than the current institutional framework would suggest (18 months), citing the estimated effects of El Niño on prices. The latest sequence of inflation and activity data, he adds, also supports continued calibration of the degree of monetary restraint.

“Indeed, since the last meeting, most data have come in weaker than expected, although not to the extent that the risks to inflation converging to target have disappeared. We’re still operating in an environment that calls for caution,” Secemski says. He notes that the recent improvement in headline inflation owes largely to a reversal in at-home food prices, and that the easing in core inflation has been driven mainly by specific items, while labor-intensive services inflation reached a nine-year high, rising 7.3% year over year.

On Copom’s communication, the Barclays economist doesn’t expect the Central Bank to close the door to further cuts, nor to openly endorse another 25-basis-point move. “I believe the message will be ‘agnostic’ regarding future decisions, meaning Copom will stay data-dependent. My expectation, however, is that the balance of risks will continue to be tilted to the upside, though it’s not clear to me whether that will appear in the statement or only in the minutes, as happened at the previous meeting.”

BV chief economist Roberto Padovani also expects a statement that offers no guidance on the Central Bank’s next moves, leaving the door open to either further easing or a pause beginning in September.

“Given the high degree of uncertainty, the Copom will continue to avoid committing to its next steps. That’s been the approach adopted by central banks in general,” he says.

 

Padovani also expects another cut to 14%, pointing not only to the Central Bank’s “preference” for continuing to lower rates but also to recent data supporting that scenario—particularly July’s IPCA-15 inflation reading, which he views as an important sign that inflation continues to converge toward target, albeit slowly. Weaker economic growth is also expected in the near term.

“With weaker activity and inflation converging, this calibration makes sense from the Central Bank’s perspective. Monetary policy will remain tight, but to a lesser degree.”

Daycoval chief economist Rafael Cardoso also expects the Copom to cut the Selic by 25 basis points on Wednesday and to refrain from providing guidance for the next meeting, keeping alive the possibility of another cut in September.

“When we update our model assumptions, inflation projections for the new relevant horizon—the first quarter of 2028—should change very little from previous estimates and remain around 3.2%. If that proves correct, and the model incorporates the rate path embedded in the Focus survey, there may be room for another 25-basis-point cut. That’s not our base case, and conditions would have to evolve favorably for it to happen, but the probability isn’t zero,” he says.

Daycoval’s baseline scenario has the Central Bank pausing once the Selic reaches 14%.

“In our assessment, the probability of another cut in September is still a minority scenario. If the decision brings any surprises—a lower inflation forecast, say, or comments suggesting a September cut has become the likelier outcome—we may revise our view. But for now, we see this as the pause cut,” he says.

 

Having ranked among the Top 5 in several Focus survey categories in recent months, Linus Galena economist Ricardo Meirelles de Faria holds a more optimistic view, arguing that the current level of rates is excessively restrictive despite highly expansionary fiscal policy.

“I personally expect 25-basis-point cuts at each of the next four meetings, even with the back-and-forth developments in the war with Iran,” he says.

The economist notes that much of the market was disappointed by Copom’s June meeting, despite a cut having been widely priced in. In his view, part of that frustration stemmed from the Central Bank’s “clumsy” communication.

“I believe the communication will now be similar in substance, but I expect the Central Bank to be more careful when discussing inflation’s convergence toward target over the relevant horizon,” Meirelles says, adding that Copom may leave the door open to another cut at its September meeting.

 

“When we look at activity data and the IPCA, there’s room to bring the Selic down a bit further. Real interest rates are still very high, and in that sense, I know I’m somewhat outside the consensus,” he says, projecting the benchmark rate at 13.25% by year-end. “Obviously, a lot can happen, and we’ll have to monitor the elections, but the feeling is that some of that is already reflected in market prices.”

Parcitas Investimentos chief economist Vitor Martello also expects a 25-basis-point cut at Wednesday’s meeting and believes the odds of another cut of the same size in September are rising.

“Will it signal anything about September? We don’t think so. This Central Bank doesn’t usually make decisions in advance, especially in an environment of elevated uncertainty. The strategy should continue to be monitoring data on aggregate demand, economic activity and inflation—particularly core inflation—and making the decision considered most appropriate at each meeting. In our view, that decision would be to cut another 25 basis points next week and then stop at 14%,” he says.

 

“Our assessment is that the Central Bank is gaining, not losing, confidence in its baseline scenario—one of inflation remaining under pressure but gradually converging toward target, with high rates being transmitted through the economy, which the data are confirming,” he says.

Looking beyond August, BV’s Padovani believes the ideal approach is to pause the easing cycle amid a macroeconomic environment filled with uncertainty. “I think a pause makes sense now, and as the dynamics of inflation become clearer, the process of cutting rates could resume at some point in 2027,” he argues.

Among the factors that still need greater clarity, the economist cites the dollar’s behavior through year-end, the likely effects of El Niño on food inflation, and market perceptions of fiscal policy following the presidential election.

*By Gabriel Caldeira, Victor Rezende and Gabriel Roca — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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Milei’s attacks strain Brazil-Argentina relations

Brazilian government sees remarks as unprecedented in 203 years of diplomatic ties but is still assessing long-term impact

 

 

 

President Luiz Inácio Lula da Silva’s government believes the attacks made by Argentine President Javier Milei on Saturday (25) have damaged relations between the two countries and marked an unprecedented episode in their 203 years of diplomatic ties.

Even so, the government is still assessing the possible long-term consequences. On Monday, President Lula mocked Milei by asking, “Who is this guy?” Finance Minister Dario Durigan, meanwhile, called the Argentine president a “clown.”

Speaking at a Liberal Party convention in São Paulo on Saturday, where Senator Flávio Bolsonaro was launched as the party’s presumptive presidential candidate, Milei called Lula a “thief” and a “former inmate.” He also attacked Supreme Court Justice Alexandre de Moraes, describing him as “bald trash.”

The remarks were prompted by a court decision barring Milei from visiting former President Jair Bolsonaro, who is under house arrest in Brasília after being convicted of attempting a coup.

“I wanted to visit my friend Jair Bolsonaro and they did not let me, but the former inmate came here to greet the inmate, right?” Milei said in São Paulo, referring to Lula and former Argentine President Cristina Kirchner. “No one stopped him from doing anything. Yet I was not allowed to visit my friend, who is also being unjustly imprisoned.”

Political differences

The comments prompted an immediate reaction from the Brazilian government.

Over the weekend, Foreign Minister Mauro Vieira summoned Argentina’s ambassador to Brazil, Daniel Raimondi, to formally convey the government’s repudiation of Milei’s statements.

On Monday, Vieira met Brazil’s ambassador to Buenos Aires, Julio Bitelli, for an initial assessment of relations between Brazil and Argentina. The meeting lasted about 40 minutes.

The two are expected to meet again after Vieira returns from Lima, where he will represent President Lula at the inauguration of Peru’s president-elect Keiko Fujimori this Tuesday (28), sources said.

Even before the event in São Paulo, the Brazilian government had been monitoring the possibility of further attacks from Milei and preparing for different scenarios.

Officials had expected that, if the Argentine president limited his criticism to Lula and voiced support for Flávio Bolsonaro, Brazil would avoid escalating its response. The government had even considered not responding at all.

Behind the scenes, officials argued that political differences are part of a democratic environment and do not necessarily affect relations between countries.

Since Milei took office in 2023, he and Lula have failed to establish a direct dialogue, but cooperation between the two nations has continued.

Cautious approach

The guidance within the Planalto Palace, the federal government’s seat, had been to exercise caution in responding to Milei’s provocations.

Lula’s advisers believe the Argentine president has little influence over Brazil’s electoral debate and view his appearances at political events in the country as an attempt to give the domestic race greater international prominence.

That assessment would change, however, if Milei attacked Brazilian institutions, criticized the electoral system or made accusations against other branches of government.

In that case, the administration intended to assess the reach of his comments before calibrating a stronger response. That is what ultimately happened.

Sovereignty message

After Milei’s remarks, Minister Vieira met President Lula at the presidential residence on Sunday night to discuss the issue.

The government is still avoiding predictions about the episode’s broader impact on bilateral relations. Its position is that institutional responses should come only when Milei attacks Brazil’s national sovereignty or democratic institutions.

From an electoral perspective, however, Milei’s criticism may help reinforce the central theme of Lula’s 2026 presidential campaign: the defense of national sovereignty.

Officials believe the current international environment, shaped by U.S. President Donald Trump’s tariff measures and Milei’s latest attacks, strengthens that message.

Lula’s allies see an opportunity to contrast a government that portrays itself as defending national interests with opponents they say are aligned with foreign pressure.

Coordinated pushback

Despite the emphasis on caution, Lula and several members of his administration mounted a coordinated response to Milei on Monday.

“Who is this guy?” Lula said when asked about the Argentine president before a meeting with South Korean President Lee Jae-myung at the Foreign Ministry.

Durigan also argued that Brazil’s economy is in a stronger position than Argentina’s, citing sovereign risk, public debt and inflation, before calling Milei a “clown.”

In an interview with Rádio Jornal de Pernambuco, the finance minister said Brazil should not be drawn into claims that its economy was heading toward an “apocalyptic” scenario.

“The clown who is president of Argentina came to Brazil and talked about Brazil when Argentina’s country risk is much higher, its public debt is much higher and its inflation is much higher,” Durigan said.

Later in the day, Milei responded with a series of social media posts.

“Lula is a former inmate and, when he came to Argentina, he visited his convicted ally. He is the founder of the São Paulo Forum [a group that brings together left-wing parties and movements from across Latin America] and keeps Bolsonaro ineligible,” read one of the posts he shared, referring to Kirchner.

*By Sofia Aguiar, Mariana Andrade and Giordanna Neves — Brasília

Source: Valor International

https://valorinternational.globo.com/

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Brazil rejects EU stance on antimicrobial controls

Agriculture Ministry demands reinstatement as approved animal-product exporter

Brazil’s Ministry of Agriculture has hardened its tone toward the European Union, calling it “unacceptable” for the bloc to require advance proof that Brazil controls antimicrobial use throughout the entire lives of animals whose meat will be exported to EU countries. In a statement , the ministry demanded that Brazil be reinstated on the list of countries authorized to export animal products to the bloc.

Meat-industry sources interpreted the statement as the government arguing that reinstatement should occur regardless of whether Brazil has products that comply with the rules by September, when the restriction takes effect. The position also reinforced the view that the ministry will not ban antimicrobial use nationwide, as poultry and beef processors had requested.

The Agriculture Ministry recently adopted full-life-cycle monitoring of antimicrobial use across different production chains. In the beef industry, for example, certifying cattle as free from substances prohibited by the EU could take at least two years. In poultry production, the process is faster, at approximately 40 days.

“Brazil supports maintaining this system and considers it unacceptable to require advance proof that measures have been fully implemented when their execution occurs progressively over the course of production cycles,” the ministry added in the statement.

The Agriculture Ministry also noted that “international relations on sanitary matters are structured around a fundamental principle: trust and transparency between the competent authorities.” It added that international recognition of official sanitary-control systems “is based on a country’s demonstrated capacity to establish rules, enforce compliance, adopt corrective measures—when necessary—and credibly certify products that meet the requirements and measures agreed bilaterally.”

In addition to defending Brazil’s control system, the ministry said it remains engaged in technical discussions with the EU concerning the sanitary requirements governing antimicrobial use in animal production.

According to the government, Brazil has not asked the bloc to relax its sanitary rules to preserve animal-product exports and remains fully committed to meeting the requirements established by importing markets.

Two meat-industry sources said the message to European authorities is that Brazil will not accept having the credibility of its sanitary system called into question during the dispute.

In its statement, the Agriculture Ministry argued that “the system’s credibility lies precisely in the competent authority’s ability to prevent the certification of products that do not yet meet the applicable requirements.”

The ministry, headed by André de Paula, also emphasized that the government assurances provided by Brazil “concern the reliability of the official inspection and certification system, while the availability of eligible products results from implementing those assurances throughout the respective production cycles. These are distinct and complementary aspects of the process of complying with sanitary requirements.”

The ministry said documents sent to the European Union detail official inspection mechanisms and control guarantees for the beef, poultry, egg, honey, and fishery-product supply chains. According to the ministry, Brazil’s system ensures “verification of implementation, inspection, traceability, monitoring, and certification of compliance with the sanitary requirements established by the EU.”

In May, the European Commission announced that Brazil would be removed from the list of countries authorized to export animal products to the bloc beginning September 3, citing failures to prove that antimicrobials were not being used in Brazilian production chains.

The meatpacking industry called for a nationwide ban on antimicrobials to signal to the EU that Brazil would ensure supplies of meat and related products made without the substances. Producers, however, said a ban could increase feed and medication costs.

*By Rafael Walendorff — Brasília

Source: Valor International

https://valorinternational.globo.com/

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Clean energy gains ground in Brazil’s remote regions

Advances in biodigesters and hybrid systems expand electricity access

 

 

Vila Restauração, in Acre state: electricity in an isolated community — Foto: Divugaão/Grupo Energisa
Vila Restauração, in Acre state: electricity in an isolated community — Photo: Divugaão/Grupo Energisa

In Vila Restauração, a community on the banks of the Tejo River in Acre, electricity was available for only three hours a day—the length of time its diesel generator operated. After that, the community returned to darkness. Food could not be refrigerated, the health clinic struggled to preserve vaccines and medications, and much of the local economic activity came to a halt. Today, a power plant combining solar panels, lithium-ion batteries, and biodiesel generators provides electricity 24 hours a day.

Installing the system required an investment of R$20 million and a complex logistics operation. About 200 tonnes of equipment traveled along highways and Amazonian rivers to reach the community, a journey that included more than seven days by boat. “The main lesson is that providing reliable energy to remote areas requires solutions designed for the realities of each location,” said Gabriel Mussi, director of major clients at (re)Energisa, the Energisa group’s energy-transition company and the organization responsible for the project.

With electricity available throughout the day, the health clinic can now store vaccines and medications safely, merchants have installed refrigerators and freezers, the school has permanent internet access, and mobile-phone coverage has enabled residents to use banking services and electronic payment methods.

“We suffered a great deal here in the dark. A lot of food spoiled because we had no way to preserve it. When we saw the lights come on, the entire community was overjoyed,” said Maria Ivone Cunha, a Vila Restauração resident.

The project in the Acre community is part of a strategy gaining ground in regions where extending the power grid remains difficult or expensive. Instead of relying exclusively on the construction of new transmission lines, these areas are receiving systems that combine different generation and storage technologies to ensure a reliable energy supply.

Falling solar-panel prices, advances in batteries, and the development of control systems have expanded the adoption of hybrid systems in regions where extending the power grid remains unfeasible. Combining solar generation, storage, and conventional generators is reducing fossil-fuel use without compromising supply reliability.

One example is Caiambé, Amazonas, where a hybrid plant combining diesel generation, solar power, and battery storage has begun operating. The system is expected to reduce diesel use by about 130,000 liters a year and avoid approximately 405 tonnes of carbon dioxide emissions annually.

The initiative is part of an effort to modernize so-called isolated systems, which still depend heavily on fossil fuels to supply communities that are not connected to Brazil’s National Interconnected System. Similar models are expected to spread over the coming years as new technologies become more affordable.

Rafael Segrera, Schneider Electric’s president for South America, said Brazil offers favorable conditions for expanding this model. However, it requires investment in technology and professional training. The company recently opened a sustainable energy hub in Amazonas focused on developing and disseminating solutions adapted to local conditions.

Most of these initiatives are concentrated in the region, where nearly all of Brazil’s isolated power systems are located. In these areas, combining different generation sources has proved a viable way to reduce diesel use without compromising supply reliability.

“Brazil has highly favorable conditions for accelerating this expansion. In addition to having a power mix comprising approximately 84% renewable sources and some of the world’s greatest potential for clean-energy generation, the country has technological capabilities and an increasingly favorable environment for innovation in electrification, automation, and digitalization,” he said. According to Segrera, the next step is to expand workforce training so professionals can install and operate these systems in different parts of the country.

The approach of producing energy close to where it will be consumed is also advancing beyond isolated Amazonian communities. In rural areas, instead of solar panels and batteries, the fuel may be generated daily on the property itself. Animal waste feeds biodigesters, where microorganisms convert organic matter into biogas.

The material remaining at the end of the process can also be used as biofertilizer on crops. In addition to reducing electricity and fuel costs, the technology gives agricultural and livestock waste a productive use.

Felipe Marques, CEO of CIBiogás, said the technology’s potential is likely to grow alongside the expansion of animal-protein production. “The country is on track to remain a leading exporter of animal protein, particularly given the prospect of increased demand in Asia and the new trade agreement with the European Union. As a result, even more protein production will be connected to the biogas and biomethane agenda and a just energy transition,” he said.

The projects also reflect a change in the approach to electrification investment. Rather than adopting a single solution for the entire country, a model is gaining ground that combines different technologies according to each region’s characteristics, bringing generation closer to consumers and reducing reliance on major infrastructure projects.

According to Mussi, this trend should become firmly established as projects are adapted to the needs of each location. “In a country with geographic conditions as diverse as Brazil’s, there is no single solution for achieving universal access to energy.”

The Energy Transition project is an initiative of the newspapers Valor and O Globo, sponsored by Vale.

*By Mario Camera — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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Broader fiscal gauge shows stimulus rising to 4.52% of GDP

Indicator combining government credit and unpaid budget obligations more than doubled in the second quarter, driven mainly by financial disbursements

 

 

 

 

The fiscal impulse delivered by Brazil’s federal government through credit and the so-called float from unpaid budget obligations reached 4.52% of gross domestic product in the second quarter, or roughly R$150 billion.

The estimate comes from economist Alexandre Manoel, of consultancy Global Intelligence and Analytics. In the first quarter, his Expanded Fiscal Expansion Monitor, known by its Portuguese acronym Mefa, stood at 2.19% of GDP. The indicator more than doubled in the following three months, driven mainly by credit operations.

Mefa combines credit, other Treasury financial disbursements used to carry out public policies and the float from so-called restos a pagar, or spending authorized under previous budgets but not yet paid.

Manoel plans to publish the indicator quarterly. His goal is to provide a broader picture of the stimulus the federal government is transmitting to the economy. The higher the Mefa reading, the stronger the impulse.

Economists say measures adopted by the government during this election year have made it harder to ensure fiscal sustainability and for the Central Bank to bring inflation under control. Programs captured by the indicator include Move Brasil, a vehicle-financing initiative, and the expansion of public funds.

Broader measure

Manoel argues that the traditional fiscal yardstick, the primary balance — the difference between government revenue and non-financial spending — captures only part of what the government is doing to boost aggregate demand.

That has become especially relevant, he said, after the government created several credit lines to implement public policies while operating under tight budget constraints.

In his view, Mefa’s main contribution is not the indicator itself, but the proposal for a new analytical framework in which fiscal policy is assessed along two dimensions at the same time: fiscal sustainability, measured by the primary balance, and its macroeconomic impulse.

“The primary balance tells you how the public accounts are doing. Mefa tells you what kind of impulse the government is transmitting to the economy,” Manoel told Valor. “The result is relevant because it reveals a sharp acceleration in fiscal expansion through channels that are not fully captured by the primary balance.”

In the second quarter, the Mefa impulse was driven by financial spending, which reached 3.29% of GDP. That pushed the indicator to its highest level in a decade.

Compared with the second quarter of 2022, the primary balance deteriorated by 1.82 percentage points of GDP, while Mefa increased by 5.27 percentage points.

“The fiscal expansion is much larger,” Manoel said. “That helps us understand why GDP is still growing at 2% despite high interest rates and why the NTN-B [inflation-linked Treasury bond] is yielding more than 8% in real terms, yet the market does not want it.”

With economic activity remaining resilient, investors expect higher inflation and therefore tighter monetary policy, which affects the yield curve. The Selic benchmark interest rate currently stands at 14.25%.

Market visibility

“It is an important indicator because not everyone in the market has the ability to dig into the details of the public accounts,” said Marcos Mendes, an associate researcher at Insper. “So when someone provides that service by creating an indicator that is easy to track, it helps democratize the information.”

Mendes himself occasionally tracks budget resources released through financial channels for lending purposes. His figures also point to strong growth: from 0.64% of GDP in 2022 to 1.45% this year.

He highlighted developments that often receive little attention from analysts. The government, for instance, has been changing legislation governing some public funds so that their current cash flow can be used for lending.

That is the case with the National Civil Aviation Fund, known as Fnac, and the Social Fund, whose scope was expanded to include the Minha Casa, Minha Vida housing program. As a result, Mendes said, it is misleading to view these credit lines as temporary measures financed solely by accumulated fund surpluses.

Wider fiscal lens

“We need to broaden the analysis of the public sector well beyond the basic framework that has been used for a long time — the primary balance and government bond debt,” said Bráulio Borges, an associate researcher at the Brazilian Institute of Economics at Getulio Vargas Foundation, known as FGV Ibre.

As previously reported by Valor, Borges and Manoel Pires, also of FGV Ibre, have proposed an even broader measure that would incorporate the federal government’s net worth into assessments of fiscal sustainability.

“It means stopping looking only at the primary balance and government bond debt and starting to look at all government assets and liabilities, including actuarial liabilities such as Social Security,” Borges said.

Mefa, which has been under discussion for about five months, has also sparked a public debate between Manoel and Borges on FGV Ibre’s blog.

Interest-rate debate

Manoel argues that unpaid budget obligations, credit operations, weaker fiscal-policy controls and higher primary spending have added 2 percentage points to Brazil’s structural interest rate — the rate consistent with the economy growing at its maximum sustainable pace without accelerating inflation.

He also says Mefa indicates that Brazil’s fiscal position is now worse than in 2022, the final year of Jair Bolsonaro’s presidency.

Borges, however, points to higher interest rates in the United States as another factor behind Brazil’s increase.

“Since 2022, international interest rates have also risen by two percentage points,” he said. “International rates are, in a way, the floor for what Brazil has to pay.”

To assess perceptions of Brazil’s public finances, Borges looks at the spread between long-term Brazilian and U.S. interest rates as a gauge of how bondholders are pricing risk. By that measure, he said, the current assessment is similar to 2022.

Despite their differences, Borges also believes the government’s current strategy of implementing public policy through credit is misguided.

“If the idea is for fiscal policy to help stabilize the economic cycle, it should be contractionary and work in coordination with monetary policy, but that is not happening,” he said. “Part of the reason is that there is a political and electoral cycle in the middle. Unfortunately — and we see this in many countries around the world — governments turn on every possible tap during elections, in part because it is becoming increasingly difficult for incumbents to win reelection.”

The result, Borges said, is a higher interest rate, which in turn worsens the outlook for debt sustainability.

Valor contacted the Finance Ministry for comment but did not receive a response.

By Lu Aiko Otta — Brasília

Source: Valor International

https://valorinternational.globo.com/

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