Vibra creates largest power trader in Brazil

Vibra Energia made official on Wednesday the creation of the largest trader in the free electricity market in the country. In the wake of the multibillion transaction announced in October — which began with an investment of R$2 billion in a convertible debenture — Vibra, formely known as BR Distribuidora, confirmed its option to take over 50% of Comerc.

In addition, Vibra and Comerc’s partners — manager Perfin, founder Kiko Vlavianos and executives — also reached an agreement to invest in Targus, an energy trader controlled by Vibra since last year. With Targus, Comerc jumps from the fourth to the first position in the ranking of traders, going to 2.4 gigawatts from 1.9 gigawatts.

By adding Targus to Comerc, Vibra is already beginning to show the return of CEO Wilson Ferreira Jr.’s bet on the energy transition. A year ago, when the company bought 70% of Targus’ capital, the trader was valued at R$90 million. In the transaction with Comerc, the valuation of the company more than tripled, reaching R$303 million.

Under the terms of the transaction, Vibra injected R$2 billion into Comerc’s cash reserves in October through a debenture that will be converted into 30% of the capital. Originally, the company would invest another R$1.25 billion – in a secondary tranche – to reach 50% of Comerc’s capital, but the agreement around Targus reduced the secondary stake to R$1.1 billion.

In the negotiations with Comerc’s partners, Vibra also tied a purchase option to take control of the company between 2026 and 2028. The other Comerc partners are left with a put. When they announced the transaction in October, there was still no definition of the call and put structure.

“Another market leader is born,” Mr. Ferreira Jr. told Pipeline, Valor´s business website. The country’s largest fuel trader, Vibra does not want to lose its hegemony in the energy of the future.

Vibra has been building a multi-power platform that also aims to be a leader. In the commercialization of electric energy, it is already born as a leader in the free market with Comerc. The same logic applies to the sale of ethanol, a business that will be done in partnership with Copersucar.

With Vibra’s investment, Comerc will have the drive for an expansion that foresees R$6 billion in investments until 2025, with a capacity that should jump to 3,900 gigawatts/hour from 121 gigawatts/hour per year in five years. In distributed generation, Comerc is expected go to 550 gigawatts/hour from 157.4 gigawatts/hour.

In addition to the R$6 billion in investments already foreseen, Comerc also has a pipeline of projects that can add another 1,100 megawatts-peak. “This is an asset that was not valued in Comerc’s IPO,” says Mr. Ferreira Jr. When Vibra reached the agreement to acquire the 50% stake, the company went through the distributor’s IPO, paying a premium over what investors would pay to take Comerc to the stock exchange.

In the view of Vibra executives, the renewable power market will only grow. With the easing of barriers to entry into the free electricity market, reducing the size for the use of this format, the expectation is that 50% can be purchased on the free market in a few years, a jump over the current 33%. “This is the market that we are accessing with the transaction,” says Mr. Ferreira Jr.

Vibra will appoint three members to Comerc’s board of directors. The other partners will nominate another three. The board will also have two independent members.

Source: Valor International

https://valorinternational.globo.com

/by

Scania halts exports from Brazil to Russia

Home

Scania has suspended exports of trucks from the São Bernardo do Campo plant to Russia. The Brazilian subsidiary follows the decision of the parent company in Sweden, which halted sales in the Russian market after President Vladimir Putin decided to invade Ukraine last week. The company did not inform how many vehicles will no longer be sold, nor the impact on production at the plant in the São Paulo state. Scania was the only manufacturer that exported vehicles from Brazil to Russia.

After changing its internal strategy, four years ago, the company stopped disclosing production and sales figures. But it is known that the Russian market was among the company’s foreign markets a few years ago. Three years ago, the company announced an investment plan of R$1.4 billion, aimed mainly at modernizing the São Bernardo plant, which employs 4,000.

The unit was modernized to continue to be an export hub. The latest investment program includes adapting any model to the clean energy defined in each country. A statement from Scania Latin America reproduces the company’s worldwide position regarding the conflict in Ukraine.

“Scania’s values of democracy, free trade, human rights and respect for the individual guide all company decisions.” About the recent events in Ukraine and Russia, the Swedish manufacturer said that it is continuously monitoring it closely and since last week has decided to stop deliveries of trucks and spare parts to Russia. “We continue to prioritize the safety of our employees and have been in close dialogue with our customers, suppliers and other partners to assist them in any way we can at this difficult time for humankind,” Scania said.

Some auto parts manufacturers also export from Brazil to Russia. But, in their cases, Russia is a less important destination. According to data from the National Union of the Components Industry (Sindipeças), the Russian market is in 26th place, with $26 million out of a total of $6.5 billion earned by companies in the sector with foreign sales in 2021.

The Russian vehicle market is smaller than the Brazilian one. Yet it is among the 15 largest in the world, with annual sales of around 1.7 million units. This is more than the United Kingdom or French markets sell. The Russian vehicle fleet is, however, larger than that of Brazil. There are almost 52 million vehicles on Russian roads, according to data from five years ago, while the Brazilian fleet was around 46 million in 2020.

Like Brazil, Russia is an important vehicle production center. Brazil is in the eighth position among the world’s largest producers. Russia ranked 13th in 2019.

Also like Brazil, most of the automakers active in Russia are multinationals, mainly European ones. Some have alliances with local manufacturers. As foreign companies have already chosen to suspend business in the country since the beginning of the conflict in Ukraine, the activity of the automobile industry in that country tends to be quite compromised.

French Renault, German Volkswagen and Stellantis (which includes Fiat, Chrysler, Peugeot and Citroën) have the largest operations in Russia. General Motors had stopped producing in the country a few years ago as a result of a global reorganization. Some cars produced in Brazil have already been inspired by models developed in Russia.

Volvo Cars was one of the first to react to the invasion of Ukraine, suspending the shipment of cars to Russia. In the case of the brands that produce locally, there is also a lack of components that, in good part, were supplied by Ukraine.

German company BMW will halt exports and production at its plant in Kaliningrad, on the Baltic Sea, “due to the geopolitical situation,” the company said in a statement.

According to news agency reports, Honda has suspended the shipment of cars and motorcycles to the Russian market since this Thursday. The company follows decisions already taken by Mercedes-Benz, Jaguar and Land Rover. Mercedes announced the donation of one million euros to the Red Cross in Ukraine.

Source: Valor International

https://valorinternational.globo.com

/by

Russia-Ukraine war to drive up prices of chemical products

Fatima Giovanna Coviello Ferreira — Foto: Claudio Belli/Valor
Fatima Giovanna Coviello Ferreira — Foto: Claudio Belli/Valor

The costs of the Brazilian chemical industry, which were already under pressure from the Covid-19 pandemic, tend to rise further with the Russia-Ukraine war amid rising oil and natural gas prices, said Fátima Giovanna Coviello Ferreira, head of Economics and Statistics at the Brazilian Chemical Industry Association (Abiquim).

Naphtha, a petroleum product that is the main petrochemical raw material in the country, cost $772 per tonne in January, up 56% in one year in dollars terms. Compared to December, in reais, the appreciation was 8.7%. With the oil barrel above $110, a new increase will materialize in the coming months.

“It is a different scenario from 2014, when oil prices reached almost $120 a barrel and the exchange rate was at R$2 to the dollar. Today, the barrel is at $100 and the exchange rate is at R$5 to the dollar,” the executive said.

The Abiquim-FIPE price index saw a 0.56% decrease in January, compared to December, and jumped 51.2% compared to the same month in 2021, reflecting the appreciation of oil and its impact on the cost of naphtha.

The prevailing view in the industry is that there are still many uncertainties about the sanctions that will be imposed on Russia and how this will affect natural gas, which is used as raw material and energy in the sector. Prices in the local market were already under pressure from the increased demand for power generation. “We are very worried about this pressure that is coming from outside,” she said.

In a first moment, since there is idleness in certain segments of the local chemical industry, the difficulty in accessing products abroad may encourage domestic purchases and raise the occupation rate.

In January, with some improvement in production rates and domestic sales of chemicals for industrial use, the use of installed capacity in Brazilian industry reached 82%, the best rate since October 2018 and the highest for the first month of the year in last four years. Still, the index is low for continuous production and capital intensive activity.

“This instability could help the local industry to produce more, but with no effect on products such as fertilizers and methanol [which have ceased to be produced locally in recent years],” she said.

The sector monitors with concern the supply of fertilizers and intermediates in the international market, since Brazil is heavily dependent on imports. Although the country has different suppliers, Russia is the main trading partner in this group.

Abiquim’s head says that the risk faced by Brazil at the moment – of shortage of input for agribusiness, a strategic sector – should open new discussions about the use of gas in Brazil. Last year, the country reinjected more gas than it imported. “It is a noble resource that could have other applications,” she said.

In the view of the industry, which recently lost an important tax break in the petrochemical chain, the Special Regime for the Chemical Industry (Reiq), Brazil lacks a state policy that prevents further decline of manufacturing, already seen in the chemicals industry – the country stopped producing fertilizers and methanol, for example, because the local product was not competitive.

Source: Valor International

https://valorinternational.globo.com

/by

As oil rises, gap with fuel prices widens in Brazil

Egypt Increases Fuel Prices by 25 Piaster

With the peak of oil prices in recent days, the gap between prices practiced by Petrobras and the international parity has widened and reached R$1 in the case of a liter of diesel, according to market estimates. The state-owned company has not changed fuel prices at refineries for 49 days and a new adjustment is just a matter of time, as the worsening war in Ukraine puts pressure on the price of the commodity, analysts say.

On Wednesday, the Brent barrel, a global benchmark, closed the day up 7.58%, at $112.93 – the highest since 2014. In addition to the escalation of the war in Ukraine and more difficulties for trading companies to buy Russian oil, factors such as the reduction in U.S. inventories and the decision by the Organization of Petroleum Exporting Countries (OPEC) to maintain April’s production growth target of 400,000 barrels a day, even in the face of tight supply, contributed to the rise of the commodity prices.

According to consultancy Stonex, Petrobras is selling a liter of S-10 diesel with a 30% difference, or R$1.10 a liter, in relation to the import parity price (IPP), while for gasoline the difference is 25%, the equivalent of R$0.80 a liter. The Brazilian Fuel Importers Association (Abicom) complains that Petrobras is systematically holding adjustments and that the windows of opportunity for private-sector trading companies are closed in the country. The entity estimates that the oil company’s lag in relation to international parity reached 25% on Wednesday – the equivalent of R$1.22 for diesel and R$1.10 for gasoline.

In the assessment of Stonex’s risk management consultant, Pedro Shinzato, this is “a very intense stress test” for the state-owned fuel policy. He points out that the company has been practicing prices below parity since January and that the difference at the moment is so high that it makes it difficult to fully align with international prices.

Mr. Shinzato believes that the oil company will, in view of this, make a partial adjustment, without passing on the entire increase seen in the last weeks. He cites, however, that the company’s lag already creates distortions in the market. Since the end of last year, Petrobras has been competing, especially in the Northeast region, with Mubadala’s Acelen, a company that owns the Mataripe refinery, in Bahia.

In a report, Goldman Sachs highlighted that the lag of Petrobras’s prices in relation to the international market is above the levels of 2021, when the state-owned company practiced, on average, prices 9% below the import parity price in the case of diesel and 15% below parity on gasoline. Goldman Sachs points out, however, that the company’s exploration and production gains with the appreciation of oil offset the lower margins in refining, if gasoline and diesel prices remain at current levels.

Faced with the peak in oil prices, the president of the Senate, Rodrigo Pacheco (Social Democratic Party – PSD/Minas Gerais), signaled the resumption next week of the discussions on two bills proposing solutions to cushion fuel prices in the country. Mr. Pacheco said that “more than ever” it is necessary to “prevent” the inflation of oil products at gas stations.

In Brazil, the average price of gasoline comes from five consecutive weeks of decline at the pumps, according to data from the National Petroleum Agency (ANP), but any adjustment by Petrobras tends to reverse the curve. The fuel was traded, on average, at R$6.56 a liter at gas stations last week, a level 1.5% below that seen in the week between January 16 and 22, when the average price at the pumps rose for the last time. Diesel, on the other hand, has remained more stable in recent weeks.

Last week, in the midst of the beginning of the invasion of Ukraine by Russia, Petrobras signaled that it would not respond immediately to the intensification of the oil price and that it would watch a little more the behavior of the commodity before deciding on possible adjustments. Claudio Mastella, the company’s commercialization and logistics head, said on February 24, before the barrel hit $100, that the stronger real helped to offset part of the increase in oil and allowed the company to keep prices unchanged since January. He also reinforced that the company avoids passing on cyclical volatilities to consumers.

Petrobras has been pressured by President Jair Bolsonaro in relation to fuel prices. Last week, he said that Petrobras CEO Joaquim Silva e Luna makes “more than R$ 200,000 per month” and that the head of the state company “has to present the solution and show what is happening.”

For Ativa Investimentos, the current rate of increase in OPEC’s supply will keep oil prices high and raises expectations for the next meeting of the bloc, at the end of March. The broker believes that, with the escalation of the conflict in Eastern Europe, Saudi Arabia and allies will have difficulties in dealing with the conflicting interests between the U.S. – which calls for a faster growth of supply – and Russia, an ally of the bloc and against to a rapid increase in production.

Atlas One manager Subhojit Daripa, meanwhile, believes that current price levels may not last. “With a barrel at $120, we may have a situation that leads to the destruction of demand. This could cause the price to fall precipitously.”

Source: Valor International

https://valorinternational.globo.com

/by

Brazil moves forward with crypto legislation

Understanding The Cryptoasset Market | Quantifi

The economic affairs committee of the Brazilian Senate unanimously approved legislation to regulate crypto assets, paving the way for votes in the upper and lower houses of Congress.

If passed, the legislation will give the Central Bank of Brazil new powers to regulate the crypto asset market.

There is some debate over how many crypto investors operate in Brazil. Some estimates suggest there are more than 3.1 million traders registered with cryptocurrency exchanges in Brazil. Senator Irajá

Source: NewsNow
https://www.centralbanking.com/fintech/crypto-assets/7934511/brazil-moves-forward-with-crypto-legislation

/by

Brazilian GDP expected to rise 4.5% in 2021

What is Gross Domestic Product, and what does it measure?

The Brazilian economy is expected to have closed 2021 at a faster pace in November and December, offsetting the weak performance in October. In the year, GDP growth is expected to have reached 4.5%, after the 3.9% drop with the pandemic in 2020.

For this year, expectations still tend to shape in the coming days depending on the evolution and consequences of the war waged by Russia against Ukraine. One reading is that the pattern of last year will be repeated in Brazil: growth concentrated in the first quarter, but with the GDP ending the year much weaker. Another reading, which can take shape, is that the conflict will undermine the drive expected for activity at the beginning of the year.

A survey by Valor with 67 financial and consultancy firms shows a median projection of 0.2% GDP growth in the fourth quarter of 2021, compared to the immediately previous three months, seasonally adjusted. In the second and third quarters, there were drops by 0.4% and 0.1%, respectively.

On the supply side, agriculture is expected to grow 6.1% from October to December 2021, but the sector has seen significant declines in previous quarters, explained by adverse weather events and harvest losses, which will still make the agriculture GDP fall 0.2% in the year, analysts estimate.

Industry even managed to grow in December, but it is unlikely to be enough to prevent a 1.5% contraction in the fourth quarter of 2021, compared to the third quarter, according to estimates. The industry suffered throughout the year with bottlenecks in global production chains. Still, after contracting 3.4% in 2020, it is expected to increase by 4.4% in 2021.

More sustained growth, however, must come from services. While the sector may slow down from a 1.1% rise in the third quarter to a 0.2% rise in the fourth, according to projections, it would end 2021 up 4.6%, after a drop of 4.3% in the previous year. “A good part of this fourth quarter result is supported by services, which should still follow in pace of recovery with vaccination. But for the rest, it’s an very weak picture,” said Marcos Ross, chief economist at Haitong. He sees GDP up 0.3% in the fourth quarter of 2021.

On demand side, in the last three months of 2021, only government consumption (up 0.4% from the third quarter) and imports (1.8%) are seen as not contracting. Gross fixed capital formation (GFCF, a measure of investment) is expected to fall 0.1%, while household consumption is expected to drop 0.1%, and exports to decline 2.7%. In 2021 as a whole, however, investments are expected to rise 16.6% after falling by 0.5% in 2020, while household consumption is expected to rise 3.4%, only partially recovering the 5.4% loss in the previous year.

Like Mr. Leal, Flávio Serrano, chief economist at Greenbay Investimentos, says that activity indicators in the fourth quarter reinforce the idea of exhaustion of fiscal stimuli that helped to avoid even greater losses in 2020. He sees, however, the possibility of a 0.1% contraction of GDP between October and December 2021, compared to the previous three months.

Depending on the GDP result for the fourth quarter, the change in growth forecast for last year as a whole would just be “a fine adjustment”, says Mr. Ross, with Haitong. “The things is to determine whether the growth was 4.5% or 4.6%. It even looked worse, which would be below 4.5%, but the November and December data show that perhaps it was not. But if you think about a broader discussion, it doesn’t make much difference.”

The end of 2021 is likely to leave a “statistical carryover” of 0.1% for 2022, a number that has already been negative in the economist’s accounts. “It’s a detail for the better, but it shows that there’s a growth problem yet to be solved,” says Mr. Ross. Although the December numbers have “a kind of positive feeling,” this is not a perception likely to be sustained in 2022, according to him.

The consequences of the war may prove to be a problem for Brazil, due to the potential pressure on energy and grain prices. And even though Brazil’s trade relations with Russia and Ukraine are limited, the conflict tends to weaken the pace of the economies of several countries more dependent on trade with the Russians – which would also have a secondary effect on activity in Brazil.

In addition to the potential damage of the war, 2022 had already begun under the effect of the triggering of contaminations by the omicron variant. But José Pena, chief economist of Porto Seguro Investimentos, believes that although January may have lost a little steam because of the pandemic outbreak, it was not to the point of having compromised the activity. Mr. Pena projects a GDP close to stability in the period and says he is cautious about the rest of the year.

The survey carried by Valor points to a median growth of 0.3% for the 2022 GDP. Mr. Ross projects a 0.1% rise from January to March, compared to the fourth quarter of 2021, and sees a contraction of 0.4% in the Brazilian activity this year. The effects of the monetary tightening throughout 2021 will be more evident in activity in 2022 and are expected to be boosted by high indebtedness and lower credit supply, points out Mr. Serrano, with Greenbay, who also foresees a 0.5% drop in GDP in this year.

Mr. Leal projects a 0.3% increase in GDP in the first quarter of this year, with seasonal adjustment. The same variation is estimated for the activity in 2022. But he recalls that projections for this year still do not consider possible effects of the war between Russia and Ukraine. It is still uncertain, for example, how long agricultural commodities and oil prices can stay higher, which affects global and domestic inflation. This scenario, accompanied by a devalued exchange rate due to risk aversion, can lead to a higher interest rate than expected for the year, he notes, which would further restrict activity.

Mr. Leal says he believes the peak impact of the current monetary tightening cycle on the economy is likely to happen between the second and third quarters of this year. “The question mark is the repercussion of this for the 2023 economy.”

Source: Valor International

https://valorinternational.globo.com

/by

Brazil’s Embraer, airlines monitor impacts on costs, operations

Embraer engata rota ascendente após rejeição pela Boeing

Although the war in Ukraine has not affected the flights of Brazilian companies so far, planemaker Embraer and airlines Latam, Gol and Azul are closely monitoring its developments, which may have a significant impact on costs and operations in the sector.

In the case of Embraer, the international community’s sanctions against Russia may disrupt access to titanium, a light metal used to make aircraft and their engines.

VSMPO-Avisma, controlled by the state-owned Rostec, has a monopoly on the production of titanium and parts forged with the metal in Russia. And it is an important supplier to the aircraft industry. Boeing and Airbus also depend in good part on Russian titanium.

An embargo on Russia, therefore, could directly impact the largest planemakers in the world.

According to Reuters, VSMPO-Avisma accounts for 25% of global titanium supply. Specifically in the aircraft market, this share rises to 50%, according to international consultants.

Sought for comment, Embraer said it evaluates the titanium supply chain on an ongoing basis, as it does with other materials. “At this moment, the supply of titanium does not concern Embraer, since the company holds a high level of stock of this material,” the company said in a note.

In a LinkedIn post last week, Latam Brasil CEO Jerome Cadier listed potential impacts of the war for airlines and stressed that the pressure on costs is “undeniable,” also citing titanium. “Unfortunately, in the situation the industry is in, these increases will impact ticket prices. It is a shame, especially at a time when what we most want is to fly again,” he wrote.

In the executive’s view, the war in Ukraine can affect the capital market and the availability of credit and the price and supply of commodities relevant to the industry, including metal.

Sought to comment on the consequences of the war, Latam said it does not fly to Ukraine and, so far, its flights have not been affected by the closure of airspace in different countries.

Gol also reported that it does not operate flights to Ukraine and reinforced recent positioning of the Brazilian Association of Airline Companies (Abear), which already warned about potential impacts of the exchange rate and oil on the costs of the airline industry.

“About this sad moment, we inform that our members do not operate flights that have as final destination the conflict region and we follow closely the impacts on the foreign exchange rate and oil prices, which can further increase costs,” the association reported.

Azul said in a note that “its operations continue as normal and without any impact.” “A possible effect on the value of tickets will depend on the impact of the war on costs such as foreign exchange rate or oil, which are constantly monitored by the company,” it added.

Source: Valor International

https://valorinternational.globo.com

/by

War likely to have little impact on Brazilian economy, experts say

Economists and banks, however, warn that it depends on the duration of the conflict

Brazilian economy: encouraging news from the IMF - Europartner

The Brazilian economy is little exposed to the Russia-Ukraine war and is likely to suffer little impact, at least for now. This scenario, however, will only be confirmed if the conflict does not spread to other European countries, economists and banks told Valor.

For the head of economic research in Latin America at Goldman Sachs, Alberto Ramos, the fastest impact will be seen in inflation via commodities, and not in growth. “The first quarter will still be very much influenced by the omicron dynamics, which affected activity in January and there was a small rebound in February,” he said.

“Potentially, the implication [of the Russia-Ukraine conflict] will be to backfire a bit on the inflationary process and make the Central Bank more conservative because of the impact on commodity prices,” he added.

“Brazil’s trade levels with Russia and Ukraine are quite limited. The supply of fertilizer for the agribusiness can be impacted by this channel and put more pressure on food prices and energy prices with oil above $100. It means more pressure on Petrobras. But the impact, I say it again, is more immediate on inflation than on growth. We are already in March, there is not much more to go for the first quarter,” says Mr. Ramos.

A report by Dutch bank Rabobank goes in the same vein. The economists at the financial firm note that with the exception of the fertilizer market, Brazil is little exposed to Russian supply or demand and believe that the military attack should only indirectly weigh on Brazilian activity.

The report entitled “A Russian cloud over Brazil,” says that everything depends on the duration of the conflict. The side effects of the war, says the bank, may come from energy prices and uncontrolled imported inflation, and the likelihood of higher interest rates.

With high inflation, Rabobank projects a Selic rate of up to 12.25% in the second quarter of this year, with a slowdown to 11.75% by the end of the year. But it warns that a prolonged conflict may delay the easing cycle.

In the evaluation of the chief economist of RPS Capital, Gabriel Leal de Barros, the prospect of increased public spending in Brazil, because of the elections, may end up offsetting the negative effect coming from the war in Russia. He recalls that states and municipalities have about R$180 billion in cash today, equivalent to 2% of GDP. “Some states are already spending more, giving salary raises for civil servants, and this move acts as a counterweight to the negative effect of the war on activity,” he said.

Source: Valor International

https://valorinternational.globo.com

/by

Ukraine calls for “solidarity” from Brazil, condemnation to Russia

Ukraine’s chargé d’affaires in Brazil, Anatoliy Tkach, demanded an “official expression of solidarity” of the Brazilian government with Kiev and the country’s condemnation of Russia’s “aggression” against its territory.

“We are still waiting for the official expression of solidarity [from the Brazilian government] along with messages in favor of [the Russians] ceasing their aggression,” Mr. Tkach, the most senior Ukrainian diplomat in Brasília, told reporters. “In personal contacts with Brazilian diplomats, we are hearing this solidarity.”

The Ukrainian diplomat’s remarks came moments after the release of a note from Brazil’s Foreign Ministry calling for “the immediate suspension of hostilities and the beginning of negotiations conducive to a diplomatic solution to the issue […] and taking into account the legitimate security interests of all parties involved and the protection of the civilian population.”

The target of a Russian attack by land, sea and air since the early hours of Thursday, however, Ukraine has shown that it expects a more forceful manifestation from the Brazilian government against Moscow.

In the interview, via videoconference, Mr. Tkach mentioned at least four other times this expectation.

“We are in contact with Brazilian authorities and we are expecting Brazil to condemn this Russian attack on Ukraine,” he said. “What we expect from all countries is the condemnation of the attack and help to Ukraine,” he continued, explaining that the country needs both humanitarian and financial aid, fuel, food and armaments.

“We expect the Brazilian government to speak out and condemn this Russian aggression,” he said.

At another point, also asked about the Brazilian position, he replied, “Right now we need strong signals to convince Russia to back down and cease hostilities. [We need] condemnation of Russia’s actions.”

The diplomat then said that Ukraine would like the international community to levy sanctions against Moscow.

Asked what kind of sanctions Brazil could apply, he said, “First, we need a strong signal against aggression.”

Last week, President Jair Bolsonaro was in Moscow for a visit that displeased the United States in particular. In a statement, the White House even said that Brazil seems to be “on the other side of where the global community stands.”

Mr. Tkach said that the Ukrainian government even expressed to the Foreign Ministry the desire that President Bolsonaro also visit Kiev last week, to “balance” the visit.

“We were hoping at that moment that the president of Brazil would visit Ukraine,” he said, adding that there had been talks for a visit of Mr. Bolsonaro to the country since 2019.

In Moscow, Mr. Bolsonaro also expressed “solidarity” with Russia. The diplomat was asked whether this displeased Ukraine.

“We do not know in what context [Mr. Bolsonaro] expressed solidarity. But we do know that during the visit the Brazilian president expressed a desire for a peaceful solution,” he said. “Putin stated [to Mr. Bolsonaro] that he was working for a peaceful solution. But Ukraine knows that the word of the Russian president is worth nothing.”

According to Mr. Tkach, the country has been prepared since 2014 for a “Russian aggression,” it just didn’t know exactly when it would occur. He further stated that there are currently 200,000 Russian troops on the borders with Ukraine and recommended that all Ukrainian citizens who are outside the country stay where they are.

According to him, “before the Russian aggression, massive cyberattacks against websites of the Ukrainian authorities took place.” And he said that the goal of Russian “aggression” is “to seize Ukrainian territory and establish control of the occupation.”

“This is war. It is an attack on the sovereignty and territorial integrity of Ukraine and a violation of the Charter of the United Nations,” he said. “We are making all diplomatic efforts to end this aggression as soon as possible.”

On another front, also in Brasília, the chargé d’affaires of the U.S. Embassy in Brazil, Douglas Koneff, called for unity and firmness on the part of democratic nations against Russia’s “threat” to the “basic principles” of international law.

“Russia’s violation of Ukraine’s sovereignty and internationally recognized borders is an unprovoked and unjustified attempt to upend the basic principles of international law,” Mr. Koneff said during a news conference.

“We must stand firm and united against such a threat, which violates not only European security, but the security of people across the world. We must remain united to support Ukraine, and the right of all sovereign nations to choose their own paths, free from the threat of coercion, subversion or invasion.”

Mr. Koneff is the top representative of American diplomacy in Brazil since the departure of former ambassador Todd Chapman, who retired in August last year and has not yet been replaced. Democratic activist Elizabeth Bagley has already been nominated by President Joe Biden, but has yet to be approved by the Senate.

As the chargé d’affaires recalled, respect for the territorial integrity of all nations is at the root of the international order. “The U.S. continues to believe that diplomacy is the way for nations to resolve differences. Together with the international community and democratic nations everywhere, we clearly and firmly call for de-escalation and a return to diplomacy,” he said.

In contrast to the main leaders of the West, who immediately condemned the Russian invasion of Ukraine, President Jair Bolsonaro remained silent Thursday about the Russian attacks. At the moment that bombings were hitting several regions of the Eastern European country, the Brazilian president went to São Paulo to participate in a motorcycle rally and construction inaugurations. In the evening, when he learned that Vice President Hamilton Mourão had said that Brazil did not agree with the invasion, he discredited the vice president and emphasized that the country’s position is up to the president.

“Article 84 of the Constitution says that the one who speaks on this matter is the president. And the president’s name is Jair Messias Bolsonaro. And that’s it. So, with all due respect to this person who said this, he is talking about something that should not, that is not within his competence,” he complained, during a live broadcast on social media.

Alongside Chancellor Carlos França in the broadcast, President Bolsonaro reiterated what he had said before the worsening of the crisis, advocating peace. However, he avoided opining on the Russian attack.

“We want peace, we traveled in peace to Russia, we made exceptional contact with President Putin, we settled the issue of fertilizers for Brazil. We are dependent on fertilizers from Russia and Belarus,” he said, mentioning the trip last week. “And the most important country in the world is called Brazil, I am president of Brazil. We will do everything in our power for peace. So the one who is talking about these issues is called Jair Messias Bolsonaro, no one else is talking. Whoever is talking is taking a stab at what is not his place.”

Source: Valor International

https://valorinternational.globo.com

/by

Bolsonaro did not believe in war in Ukraine during travel to Moscow

Russian President Vladimir Putin, right, and Brazil's President Jair Bolsonaro shake hands after a joint news conference following their talks in the Kremlin in Moscow, Russia, Wednesday, Feb. 16, 2022 — Foto: Mikhail Klimentyev/AP
Russian President Vladimir Putin, right, and Brazil’s President Jair Bolsonaro shake hands after a joint news conference following their talks in the Kremlin in Moscow, Russia, Wednesday, Feb. 16, 2022 — Foto: Mikhail Klimentyev/AP

President Jair Bolsonaro traveled to Moscow last week without believing an armed conflict would occur on Ukrainian territory, despite several warnings raised in the international community in the weeks leading up to the visit.

At the Planalto Palace and the Foreign Affairs Ministry, known as Itamaraty, the feeling was that Russia would not go ahead with the idea of invading Ukraine because of the high economic cost of deploying troops and possible sanctions against the country ruled by Vladimir Putin, sources told Valor.

Contrary to what was expected in Brasilia, however, the situation has escalated dramatically in recent days, until the bombings and incursions of the Russians in Ukraine, by land, sea and air this Thursday. Not even the tightening of sanctions against Moscow, announced by several countries throughout the day, made Mr. Putin back down.

If the possibility of a war is no longer a surprise, it is also true that the Brazilian government bet until the last moment on a solution through diplomatic channels – something that not even Ukraine or the United States believed in.

“We always hope for a peaceful solution. But sometimes war happens. That’s how it is,” lamented a senior source in Brasília.

Although for Brazil the war in Ukraine came as a surprise, the Brazilian government received several warnings in recent months, especially from the United States, about the trip. The fear was that the Brazilian president would show alignment with Mr. Putin.

At Itamaraty, there was an effort to “depoliticize” the trip and demonstrate that the objectives of the Brazilian delegation in Moscow were merely commercial.

The agenda had two main highlights: facilitate imports of fertilizers and organize a meeting between CEOs of large Russian companies with Brazilian executives.

President Bolsonaro, however, managed to irritate the Americans by expressing “solidarity” with Russia. The speech, made impromptu next to Mr. Putin, ended up generating a diplomatic clash with the U.S.

The White House reacted through spokeswoman Jen Psaki, who said that “I think Brazil may be is on the other side of where the majority of the global community stands.”

A Brazilian government source told Valor at the time that “the Americans are escalating an issue that does not deserve to be escalated.”

After the first news that Russia was attacking Ukraine, the presidency and the Foreign Ministry have been asked to take a position on the conflict, especially because of Brazil’s position as a temporary member of the United Nations Security Council.

Mr. Bolsonaro was silent throughout the day. The Itamaraty issued a note calling for “the immediate suspension of hostilities and the beginning of negotiations leading to a diplomatic solution to the issue, […] taking into account the legitimate security interests of all parties involved as well as the protection of the civilian population.”

At a press conference, Minister Adriano Pucci, director of Itamaraty’s Social Communication Department, denied that Brazil’s position in the conflict is one of “neutrality.”

“Brazil’s position is one of balance, of unquestionable attachment to international law, to the resolutions of the United Nations Security Council, and to the centrality of the role of that body in finding a peaceful solution,” he said. “Our conviction is that the more a situation deteriorates, the more reason there is for dialogue. And also that Brazil does not intend to contribute to making the drums of war beat. These drums, when you look inside, are empty.”

Source: Valor International

https://valorinternational.globo.com

/by