Risk premiums rise as confidence in credit market weakens

Restructurings, corporate distress and Middle East war widen spreads, while managers say opportunities are starting to emerge, caution remains essential

 

 

 

The repricing of risk premiums, which began in February and intensified in March, reflects uncertainty and a loss of investor confidence amid a string of cases involving troubled companies and court-supervised and out-of-court restructurings, a trend worsened by the war in the Middle East, said Alexandre Muller, a partner at JGP Asset Management, and Jean-Pierre Cote Gil of Vinland Capital.

In the past, when corporate financing was far more concentrated in state-owned banks, market adjustments were not as swift. Now, with capital markets playing a much larger role in funding companies, “there is no longer any tolerance for a deviation from the path,” Muller said.

“Spreads widened sharply because uncertainty increased as a result of these events, which undermine confidence and hurt capital markets,” Muller said at an event hosted by Bradesco BBI.

According to him, the sense is that the country is taking “steps backward,” citing uncertainty over how the legal system functions and major fraud cases in the banking sector. “But looking at the historical pattern, confidence is restored and premiums normalize.”

Bankruptcy framework under scrutiny

For Cote Gil, Brazil’s current Bankruptcy Law encourages controlling shareholders, and “companies are losing their embarrassment” about turning to out-of-court restructuring. “The country needed a more creditor-friendly bankruptcy regime. Our average investor has limited appetite for risk,” he said.

He also criticized the fact that liabilities in Brazil’s private-credit industry are now extremely short-term, with many funds offering same-day or next-day redemptions, forcing managers to hold high cash balances to meet withdrawals. “The industry’s average term should be D+5 [meaning investors would receive their money five business days after requesting a withdrawal]. We have tried to build products with longer lockups, but I don’t think that will become relevant for the sector as a whole.”

Cote Gil said the expectation had been for a calm first half and more volatility in the second, but that view has now reversed. He sees the widening in spreads as a technical adjustment followed by an exaggerated reaction, “which fed on itself, and the Iran war made it worse.”

He added that he does not believe the adjustment is close to over, though he noted that a significant correction is already visible, especially in infrastructure debentures, which at one point traded well below Brazil’s inflation-linked Treasury bonds, known as NTN-Bs. He recommended caution.

“The market became complacent and just accepted it. We need to understand this move before increasing allocations.”

More opportunities with caution

Spreads on tax-exempt infrastructure debentures, which had reached 80 basis points below NTN-Bs in September, widened by 34 basis points in March. The median spread moved from 53 basis points below NTN-Bs to 19 basis points below. Corporate debentures without tax incentives, meanwhile, ended March at a median spread of 118 basis points above the CDI, Brazil’s interbank deposit rate.

Victor Tofolo, head of credit management at Bradesco Asset, said on the same panel that the repricing is affecting both tax-exempt infrastructure debentures and regular corporate debentures. “We are already starting to find more opportunities, including in high grade, but we will need to study these names carefully.”

He said the adjustment in infrastructure debt is bringing the risk-return ratio back to more appropriate levels and, above all, increasing dispersion. Previously, he said, spreads were clustered too closely together, which made it harder for managers to generate value.

Cote Gil said his cash position was high, between 25% and 30%, so he could seize opportunities. “But it is a challenge. At the same time an opportunity appears, redemptions come in because the change in prices hurts fund performance, and part of that cash has to be used to meet withdrawals.”

Muller of JGP said the firm’s Idex index, created to track private-credit rates and regarded as one of the market’s main benchmarks, will soon release a report that already captures the recent widening in spreads. He said the index has returned to the first quartile, signaling a recovery in fund returns, including performance above the CDI.

*By Liane Thedim — Rio de Janeiro

Source: Valor international

https://valorinternational.globo.com/

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Brazil court suspends export tax for five foreign oil majors

Equinor, TotalEnergies, Petrogal, Shell, Repsol Sinopec win injunction as government prepares appeal

 

 

 

A federal court in Rio de Janeiro has granted a preliminary injunction to five oil companies, suspending the collection of a 12% tax on crude oil exports, which the government introduced in March through a provisional presidential decree. The tax was designed as a way for the federal government to offset measures adopted to contain the impact of rising oil prices in the domestic market following the outbreak of war in the Middle East. The decision, issued by federal judge Humberto de Vasconcelos Sampaio of the 1st Federal Court of Rio de Janeiro on Tuesday (7), benefits multinational groups Equinor, TotalEnergies, Petrogal, Shell, and Repsol Sinopec. According to sources, the government plans to appeal.

In their filing, the companies argued that Provisional Presidential Decree No. 1,340/2026, which set the 12% rate, distorted the fiscal nature of the export tax, claiming it is being used as a “purely revenue-raising instrument.” The decision states that the plaintiffs alleged violations of the principles of legal certainty, equality, free competition, and ability to pay, as well as the need to comply with the principle of prior notice, given the tax’s clearly fiscal purpose.

The judge noted that the federal government argued there was no creation of a new tax, but merely a change in the rate. According to the ruling, the government maintained that the previous zero rate reflected an economic policy aimed at encouraging exports and that taxpayers have no acquired right to maintain a preferential rate. “However, this argument does not hold in light of the specific regulatory context of Decree No. 1,340/2026,” the judge wrote.

The ruling further states that the explanatory memorandum of the provisional measure indicates that the 12% rate has a primarily revenue-raising purpose, intended to finance government spending, without any connection to exchange rate policy, trade balance equilibrium, or external market regulation. “When an extrafiscal tax is used for revenue-raising purposes, it loses the constitutional justification for exempting it from limitations on the taxing power, and the guarantees outlined in Article 150 of the Constitution must be observed. The Federal Supreme Court has already ruled this way in relation to the Tax on Financial Transactions (IOF) and CIDE [a special tax used by the federal government to regulate specific sectors] when used as revenue instruments,” the judge wrote.

A government source said the injunction reproduces Article 10 of the provisional decree but includes three new paragraphs. One of these inserted paragraphs states that “revenue from the tax referred to in this article shall be allocated to meet the federal government’s emergency fiscal needs, as provided by regulation.” This language does not appear in the provisional presidential decree published in the Official Federal Gazette on March 12. Based on this passage, Judge Sampaio granted the injunction, stating that the export tax has a revenue-raising nature, which would not be allowed since it is classified as an extrafiscal tax.

“The wording of Article 10 of Provisional Presidential Decree No. 1,340/2026, by expressly providing that revenue from the Export Tax will be allocated to meet the federal government’s emergency fiscal needs, clearly reveals the revenue-raising purpose of the measure. By linking the tax to the financing of public expenditures, the rule eliminates any claim that it serves as an instrument of exchange rate policy or foreign trade regulation,” the judge wrote in the injunction.

Article 10 of the provisional measure contains no such paragraph or reference to “meeting the federal government’s emergency fiscal needs.” It merely states that “a 12% export tax rate is established on crude petroleum oils or bituminous minerals classified under code 2709 of the Mercosur Common Nomenclature (NCM), applied to the total value of exports.”

Government officials said it is clear that the judge, in granting the injunction, did not rely on the original text of the provisional presidential decree. “The decision was based on a provision that does not exist in the regulation,” the source said. The government also argues that the temporary tax, created to mitigate the effects of the war, has an extrafiscal—not revenue-raising—nature, serving as an economic policy and market regulation tool. These arguments will be presented in the appeal.

Equinor’s Brazil president, Veronica Coelho, said the provisional presidential decree has legal weaknesses and cannot serve a purely revenue-raising purpose. “This is the latest development for us. These uncertainties increasingly reinforce the perception of risk,” she said on Wednesday (8) after attending the Brazilian Energy Leaders Forum in Rio. She added that the company invests more than $1 billion annually in Brazil, totaling about $25 billion between 2009 and 2030, underscoring the need for regulatory and fiscal stability.

Roberto Ardenghy, president of the Brazilian Petroleum Institute (IBP), said the decree is fragile and that the organization is considering legal action against the export tax. Petrobras, which is part of the IBP, did not support the initiative and voted against filing a lawsuit, according to sources. At the same event, Mines and Energy Minister Alexandre Silveira said oil companies are “making a lot of money” from oil “speculation” in the current environment. “Why not contribute temporarily so we can lower diesel and gasoline prices?” he said.

*By Fábio Couto and Jéssica Sant’Ana — Rio de Janeiro and Brasília

Source: Valor International

https://valorinternational.globo.com/

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Plano de saúde deve custear cirurgia robótica para câncer, decide STJ

4ª turma reconheceu cobertura e determinou retorno do caso para análise de dano moral.

 

 

 

8de abril de 2026

A 4ª turma do STJ deu parcial provimento a recurso especial para reconhecer o dever de plano de saúde de custear procedimento indicado para tratamento de câncer, afastando negativa baseada na ausência de previsão no rol da ANS.

O caso envolve paciente que teve negada a realização de cirurgia com técnica robótica, indicada por médico habilitado, sob o argumento de não cobertura contratual.

 

(Imagem: Freepik)

STJ determinou que plano de saúde custeie cirurgia indicada para tratamento de câncer.(Imagem: Freepik)

No voto, o relator destacou que operadoras devem assegurar exames e procedimentos necessários ao tratamento de doenças cobertas, sendo irrelevante, em determinadas hipóteses, a natureza do rol da ANS.

Segundo o ministro, a orientação da Corte admite a chamada “taxatividade mitigada”, permitindo a cobertura de procedimentos não previstos expressamente, desde que atendidos critérios técnicos.

O relator entendeu que o tribunal de origem divergiu desse entendimento ao afastar a cobertura da técnica indicada, razão pela qual reconheceu o direito ao custeio do procedimento.

“Eu não sei porque negar [robótica], porque hoje a maioria já faz. E tem consequências muito diferentes. Na cirurgia aberta, além do risco de infecção maior, há também o risco de gerar impotência sexual do operador.”

Quanto ao pedido de indenização por danos morais, o colegiado determinou o retorno dos autos à instância de origem para análise, por demandar reexame de fatos e provas.

A decisão foi unânime.

Processo: REsp 2.235.175

Fonte: https://www.migalhas.com.br/quentes/453440/plano-de-saude-deve-custear-cirurgia-robotica-para-cancer-decide-stj

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Oil exports jump 70% as Brazil’s trade surplus widens

Higher crude shipments lift export revenue in March, while imports rise twice as fast and sales to U.S. and Argentina fall

 

 

 

Brazil posted a trade surplus in March as exports rose 10%, although imports climbed at twice that pace. The increase in export revenue was driven by oil, which accounted for 68.5% of the rise in total shipments compared with the same month in 2025.

Export volumes of the commodity increased, which analysts say partly reflects the impact of the war in the Middle East, as previously contracted shipments were brought forward.

Among Brazil’s main destinations, exports rose to China and the European Union. They fell, however, to Argentina and the United States, two traditional markets for Brazilian manufactured goods. In the U.S. case, the decline is also tied to the effects of President Donald Trump’s tariff policy.

Brazil ended March 2026 with a trade surplus of $6.4 billion, with exports of $31.6 billion and imports of $25.2 billion, data from the Foreign Trade Secretariat at the Ministry of Development, Industry, Trade and Services showed. In the first quarter, the surplus reached $14.2 billion, with exports of $82.3 billion and imports of $68.2 billion, up 7.1% and 1.3%, respectively, from the same period in 2025.

Total Brazilian exports last month were $2.88 billion higher than in March 2025, a 10% increase. Oil shipments rose at a much faster pace, up 70.4%, driven mainly by a 75.9% increase in volume.

Average export prices fell 3.1%, even though international oil prices rose during the month after the outbreak of the war in the Middle East. Oil export revenue totaled $4.77 billion in March, up from $2.8 billion in the same month of 2025, an increase of $1.97 billion.

With that performance, oil’s share of Brazil’s export revenue rose to 15.1% from 9.7% a year earlier. Even so, soybeans remained Brazil’s top export item in the month, totaling $5.92 billion, up 4.3% from March 2025 and accounting for 18.7% of total export revenue.

“The conflict in the Middle East left a direct mark on the March numbers, and that shows up on the export side,” said Ariane Benedito, chief economist at digital bank PicPay. “Brazil took advantage of a window of stronger demand from oil-importing countries seeking to diversify supply amid instability in the Strait of Hormuz, but the contracts that had already been signed still did not fully reflect the geopolitical risk premium.”

The net effect of oil on the month’s trade balance was positive by $1.85 billion, Benedito noted. Without that impact, she said, the March surplus would have been just $4.55 billion. “That shows how nonrecurring the March result was and how dependent it was on a specific external factor: the redirection of oil cargoes during a short-term window shaped by geopolitics.”

China demand

Government data show that China accounted for $1.6 billion of the $1.9 billion increase in Brazil’s crude oil exports in March. Shipments to China totaled $3.1 billion last month, or 64.6% of all Brazilian crude oil exports, a jump of 111.2%. The United States was the second-largest market, with a 6.8% share.

Looking at export destinations more broadly, André Valério, chief economist at Inter, pointed to higher overall shipment values to China and the European Union, up 17.8% and 7.3%, respectively.

Exports to the United States and Argentina, however, fell 9.1% and 5.9%, respectively, from March 2025. Even before the war, he noted, the expectation was that trade flows with the U.S. would not recover immediately, even after the rollback of the so-called “tariff hike,” which had imposed tariffs of as much as 50% on Brazilian products under the International Emergency Economic Powers Act, the U.S. economic emergency law.

“When a [trade] network is disrupted, it does not come back together so easily. This weakening was already expected,” he said.

José Augusto de Castro, president of the Brazilian Foreign Trade Association, said the data show how Brazil has become increasingly dependent on the Chinese market, which already takes most of the country’s soybean and iron ore exports.

In his view, despite the uncertainty surrounding the war in the Middle East, Brazilian oil exports are likely to become even more concentrated in China under the current geopolitical backdrop, given the volume that the Asian giant is able to absorb.

Lucas Barbosa, an economist at asset manager AZ Quest, noted that Brazil had already been posting strong growth in oil production over the past year. “There is a scenario in which the trade balance for oil and petroleum products could top $50 billion this year. And oil above $100 a barrel should support the trade balance and economic activity in the short term. Unfortunately, on the inflation side, because we import part of our fuel products, we are not fully insulated from the shock.”

Imports also accelerate

Exports, said Valério of Inter, should get a boost in 2026 from oil as a consequence of the war, and that effect should be greater for the overall trade balance than the impact on imports from higher fuel and fertilizer prices.

“We see upward bias for the trade surplus at the end of this year compared with our pre-war forecast,” he said. Inter’s 2026 trade surplus estimate, previously closer to $73 billion or $74 billion, now has an upward bias toward something closer to $80 billion.

On the import side, Herlon Brandão, director of foreign trade statistics and studies at the Foreign Trade Secretariat, said diesel import volumes fell 20% in March, but cautioned that it is still too early to directly link that movement to the conflict in the Middle East and that more data are needed.

“We are looking here at documentary records. These operations take time to clear customs, and fuel has that characteristic. So we may be looking at shipments that were cleared in March but may actually have arrived in earlier months.

“So, to say that the conflict is affecting flows, we need to wait a little longer.”

Imports in the petroleum fuel oils category, which includes diesel, reached $1.38 billion in March, up 20.5% in value. Prices rose 21.3% while volume fell 0.6% from the same month in 2025.

The data also show that imports of fertilizers totaled $1.31 billion, up 61% from a year earlier. Imported volume rose 31.1% and average prices increased 22.8%.

Barbosa of AZ Quest highlighted the broad increase in total imports in March, not only in value but also in volume, with gains of 20.1% and 18.9%, respectively. He said the figure differed from what had been seen through February, when foreign purchases still pointed to a plateau, suggesting a cooling in economic activity.

One figure that stood out was passenger car imports, which reached $1.13 billion in March, up 204% from the same month in 2025.

Barbosa noted, however, that the increase in import volumes was spread across several items, which “raises a warning flag.”

“We need more data to tell whether this is a reacceleration in activity or an isolated figure. We need to look at the other activity indicators,” he said.

*By Giordanna Neves and Marta Watanabe — Brasília and São Paulo

Source: Valor International

https://valorinternational.globo.com/

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Brazil’s M&A has best quarter since 2021 as foreigners return

Big-ticket deals lift first-quarter value 30% as companies race to close transactions before the presidential election cycle adds uncertainty

 

 

Brazil’s mergers and acquisitions market regained momentum in the first quarter of 2026, helped by large deals and a push by companies to wrap up transactions before the election period intensifies.

A survey by Seneca Evercore covering January through March shows that deals totaled $15.9 billion, up 30% from the same period last year. It was the strongest first quarter since 2021.

The recovery, however, came with fewer transactions. There were 153 deals in the quarter, down from 198 a year earlier, a sign that activity has picked up again on the back of larger transactions.

Two deals accounted for a meaningful share of the total volume: the combination of Odontoprev, a Brazilian dental plans company, and Bradesco Saúde, Bradesco’s health insurance arm, estimated at $5.8 billion; and the $1.9 billion sale of Companhia Brasileira de Alumínio (CBA), the Brazilian aluminum producer owned by Votorantim, to China’s Chinalco and Anglo-Australian mining company Rio Tinto.

For Daniel Wainstein, a partner at Seneca Evercore, the trend points to a revival in M&A after two weaker years. “Many transactions that had been put on hold last year came back at the start of this year.”

He said companies and investors are trying to take advantage of a more predictable environment in the first half to complete deals before conditions potentially become more unstable in the second half because of the presidential election. In 2025, Brazil’s M&A market totaled $58.4 billion.

Political uncertainty remains one of the main obstacles to this type of transaction, he said. “What the market needs is less uncertainty. As polls define the landscape, it becomes easier to price assets because volatility declines,” he said. His expectation is that, once the election picture becomes clearer, negotiations will move more smoothly.

Foreign interest returns

At the same time, there are signs that foreign appetite is improving. Overseas investors, especially Americans, have started paying closer attention to Brazil again.

“With China off the current U.S. strategic map and India already saturated with investment, Brazil is the main ‘third way’ among large-scale emerging markets,” Wainstein said.

That interest has focused on sectors such as financial services, renewable energy and technology. In finance, changes are underway as independent platforms expand in wealth management, insurance and lending.

“There is a real revolution in the sector,” he said. In his view, that shift is creating room both for fresh investment and for mergers among smaller companies.

Longer-term funding

Credit conditions have also supported the trend. Brazilian companies have been extending their debt maturities, replacing short-term loans with longer-term funding raised in the capital markets.

For Wainstein, that lengthening of debt profiles allows companies to pursue investment plans with less pressure on cash generation, creating value for shareholders.

With more investors active in the market, companies with stronger capital structures have been taking advantage of the moment to consolidate fragmented industries.

“The opportunity to finance this through long-term instruments changes the game significantly,” he said.

By sector, technology led deal volume in the quarter with 18%, followed by consumer and retail at 15% and financial institutions at 14%. In addition to the large healthcare and mining deals, the report points to transactions in telecommunications involving IHS Towers and Desktop, and in energy involving Wilson Sons and Petrobras assets.

Wainstein expects the pace to continue in the second quarter. “The trend is for the recovery to continue compared with 2024 and 2025,” he said.

The prospect of lower long-term interest rates remains a tailwind, especially for companies that depend more on growth than on heavy investment in physical assets, such as technology and education businesses.

*By Vitória Nascimento and Mônica Scaramuzzo — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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Rising rents push companies out of São Paulo’s Faria Lima

Lease renewals drive firms to cheaper districts as prime office costs surge

Office lease contracts signed during the pandemic are now coming up for renewal, triggering a wave of relocations as companies seek better cost-effective alternatives.

Vacancy rates in São Paulo, which reached 23% in prime office buildings in 2021, fell to 13.9% by the end of 2025 and are expected to continue declining, albeit gradually. As a result, asking rents in the most competitive areas have been rising.

On Faria Lima—São Paulo’s premier office corridor—average asking rents reached R$280.90 per square meter at the end of 2025, an increase of 49.6% compared with 2020 and 81% over 2022, according to real estate consultancy Binswanger Brazil.

“The strategy was to lease at attractive prices years ago, already anticipating renewals,” said Melissa Spinelli, director of transactions and real estate business at Binswanger. “Prices were appealing, so companies could secure space on Faria Lima at levels that are no longer feasible today.”

However, with contract renewals, staying in the same location has become unviable for many tenants. “We see this frequently—companies saying that if they cannot reach a certain price in renegotiation, they will leave,” she said.

For companies that need to maintain a presence in the area, one solution has been to split operations, keeping part of their footprint in Faria Lima while relocating other functions to districts with higher vacancy and lower costs. Unlike Faria Lima, which ended last year with just 6.8% vacancy, other areas still offer significant availability.

XP, for example, leased 17,000 square meters in Chácara Santo Antônio while returning 4,500 square meters in Faria Lima, although it has not exited the area entirely. Verisure gave back 1,600 square meters in the São Luiz building, in the Juscelino Kubitschek avenue region, another prime location, and leased 7,000 square meters in Parque da Cidade, a complex also located in Chácara Santo Antônio.

According to Spinelli, the return to in-person work has increased demand for office space, but not necessarily in the most expensive locations. “Companies that need to be in these areas stay, while the others move to lower-cost regions, often in newer and higher-quality buildings,” she said.

Districts such as Chácara Santo Antônio are emerging as expansion hubs for office supply in São Paulo, with new high-end buildings still seeking tenants. Vacancy in the area stood at 32% at the end of 2025, with average asking rents of R$62 per square meter.

Another trend identified by Binswanger is companies opting for smaller buildings shared with fewer or no other tenants, allowing for greater customization. Amazon, for instance, is set to leave the Juscelino Kubitschek avenue area for a standalone building in Pinheiros. Netflix, earlier this year, moved from Alphaville to a low-rise building on Rebouças Avenue.

As explained by Paulo Izuka, head of projects at Landsight, Binswanger Brazil’s market intelligence arm, such moves toward areas like Pinheiros, Marginal Oeste, and Jardins reflect companies seeking “prime” locations at more affordable prices than those around Faria Lima.

Casas Bahia also relocated last year, moving from the Eldorado Business Tower to a property on Marginal Pinheiros, near the Berrini district, where it also opened a concept store.

This type of movement has become more common as the market offers a wider range of office options at different price points, including in areas not traditionally seen as corporate hubs, such as Rebouças and Pinheiros. “There is a growing opportunity in other regions,” Izuka said.

Despite this shift, Faria Lima remains highly attractive and is still considered a near-mandatory address for companies in finance, technology, and legal services. However, Spinelli sees a cap for further rent increases in the area. “Prices are already very high—there is a limit. Companies cannot pay any price, with few exceptions,” she said, although she does not expect rents to decline.

*By Ana Luiza Tieghi, Valor — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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Lula risks political clash with Congress over workweek reform

Plan to bypass constitutional amendment route risks friction with Lower House leadership

The government of President Lula has decided to send Congress a bill to abolish the so-called 6-on-1 workweek, where employees work six consecutive days followed by one day of rest. However, the move has caused division within the ruling coalition, with concerns that it could strain relations with the Speaker of the Lower House, Hugo Motta. Therefore, the government intends to consult Motta prior to officially submitting the proposal.

The draft being discussed would establish two days of weekly rest, a maximum 40-hour workweek, and no reduction in wages. The measure is one of the administration’s main labor initiatives in an election year, though business groups warn it could slow economic activity and cause job losses.

The decision to pursue a bill was made last week, but the timing of its submission has not yet been determined.

Earlier this year, the government considered dropping the proposal after Motta signaled that Congress would proceed with the issue by appointing a rapporteur. However, nearly two months later, officials in the executive branch believe the matter has stalled, citing a lack of significant progress in the Constitution and Justice Committee.

Another concern is the format currently being discussed in Congress—a constitutional amendment. Under this plan, the president would lack veto power. Government officials worry that lawmakers might propose adjustments that broaden exceptions to the original proposal, leaving the executive with little ability to act.

Additionally, constitutional amendments need a three-fifths vote in both houses of Congress, in two rounds of voting—a high threshold that makes the process uncertain.

By contrast, an ordinary bill can be approved with a simple majority in a single vote. If submitted with constitutional urgency, it can also require Congress to act within 45 days by blocking the legislative agenda until it is addressed.

Although officials close to the presidency say the decision to send the bill has effectively been made, government negotiators in the Lower House remain cautious and have avoided confirming the move.

Their assessment is that submitting a bill could be viewed by Motta and party leaders as a provocation, given the speaker’s repeated defense of addressing the issue through a constitutional amendment instead of ordinary legislation.

In a recent meeting, Motta told government officials he planned to act swiftly and pledged to deliver the amendment approved by a special committee as early as May.

According to these officials, the government’s main concern was the pace of discussions and the risk that a slower process could cause the proposal to lose momentum. Motta’s signal of faster progress was therefore well received—reducing the incentive to submit a separate bill that could trigger political friction and complicate negotiations.

By Sofia Aguiar and Beatriz Roscoe — Brasília

Source: Valor International

https://valorinternational.globo.com/

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Brazilian soil analysis technology expands to U.S.

Company launches pilot projects, targets lab by 2030

 

 

 

The rapid expansion of Brazil’s agribusiness over the past 50 years has largely been driven by the “tropicalization” of technologies—adapting crops and techniques developed for colder climates to the country’s tropical conditions. Now, a company in the sector is betting on the reverse path: exporting Brazilian expertise to U.S. farmland.

IBRA Megalab, a Brazilian soil analysis laboratory, is investing R$5 million in a technology transfer program to operate in U.S. agriculture. So far, the funds have been allocated to developing and validating methodologies to assess U.S. soil types, as well as to institutional outreach and market prospecting.

According to Armando Saretta Parducci, director at IBRA Megalab, the group’s ambitions go further. By 2030, the goal is to establish a soil analysis laboratory in the United States. “That will happen once we define a primary region to operate in and move forward with a structural investment,” he said.

The main attraction of entering the U.S. market is its scale. According to IBRA, the U.S. soil analysis market reached $800 million in 2025—up to five times larger than Brazil’s. “It’s a huge opportunity that we’ve identified,” Parducci said.

He noted that Brazil’s experience with low-fertility soils has generated technical expertise that can help address emerging agricultural challenges, including boosting productivity, improving fertilizer efficiency, and measuring soil carbon.

“There is growing interest in more advanced soil diagnostics technologies, especially those that integrate laboratory analysis with digital agriculture, soil mapping, and carbon-related metrics,” he said.

Several pilot projects are already underway. One involves a farmer in Illinois who also operates in Brazil and is already an IBRA client in Luís Eduardo Magalhães, Bahia. Another project is being conducted in partnership with Agtegra, a cooperative based in North Dakota.

The laboratory has accessed 150,000 soil samples from the United States to develop analysis technologies tailored to the local market and its main crops.

“Our current focus is on market development and client acquisition. We plan to take part in industry events in the U.S. to showcase Brazilian technology, particularly in precision agriculture and soil carbon measurement,” Parducci said.

Founded in 1980 in Campinas, São Paulo, IBRA analyzes around 1 million soil samples per year, covering approximately 20 million hectares. The group also sees new opportunities in Brazil and is investing in expanding its domestic footprint.

It currently operates laboratories in Sumaré (São Paulo), Maringá (Paraná), Naviraí (Mato Grosso do Sul), Sorriso (Mato Grosso), and Luís Eduardo Magalhães (Bahia). A new unit is expected to open in Passo Fundo (Rio Grande do Sul) by the second half of the year, with an investment of R$3 million.

*By Marcelo Beledeli, Globo Rural — Porto Alegre

Source: Valor International

https://valorinternational.globo.com/

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Brazil income keeps rising, but household spending stalls

Economists struggle to explain why stronger earnings are no longer translating into faster consumption

 

 

Economists are puzzled by the growing gap between Brazilians’ income, which keeps rising, and household consumption, flat in the last quarter of 2025.

Several explanations are on the table. A larger share of household income may be going to debt payments. Prices are still high. And wage income appears to be rising more because people who already have jobs are earning more, rather than because many new workers are entering the labor market.

That is unusual. For years, income and consumption tended to move in tandem: when households earned more, they spent more. Since the pandemic, that link has weakened, and the gap became much clearer in 2025.

“Up through 2023 and 2024, income and consumption were still broadly moving together. In 2025, that divergence became much more pronounced,” said Rodolfo Margato, an economist at XP. Yihao Lin of Genial Investimentos said the gap has started to look like a “crocodile mouth” opening wider, which he described as puzzling.

By Margato’s calculations, the Central Bank’s broad measure of gross disposable household income rose about 4.8% in real terms last year. XP’s own gauge of disposable household income from all sources showed a similar increase. Yet household consumption in GDP rose only 1.3% in 2025. “That result surprised us, given what our income proxy was signaling,” Margato said.

He points to another sign that something is off. XP uses a model to forecast consumption based on household disposable income, credit origination and consumer expectations from Getulio Vargas Foundation’s confidence index.

“Historically, this model has worked very well. As a rule of thumb, going back to the beginning of the century, about 70% of additional household income tends to flow into consumption. This model was pointing to consumption growth in GDP closer to 2%,” he said.

Instead, household consumption was flat in the fourth quarter of 2025 from the previous three months, after edging down 0.1% in the third quarter. The market had expected a 0.3% increase.

After that result, Genial, which had been looking for consumption growth of around 0.5%, revised its 2026 GDP forecast. “Our scenario for this year was heavily based on stronger household consumption. The labor market had been surprising, the wage bill was accelerating, and that gave us the impression consumption could be much stronger. That did not happen. The labor market alone no longer seems to be enough to drive it,” Lin said.

Wages rise, spending lags

Fernando Montero, chief economist at Tullett Prebon, notes that restricted household income has continued to rise as a share of GDP. Since the start of the Central Bank’s series in 2013, it has increased by 5.7 percentage points. That is not a record, but earlier peaks came either during the pandemic, when emergency aid was massive, or during the 2015-17 recession, when weak nominal GDP, rather than strong income, supported the ratio.

Breaking down the Central Bank figures into labor income, based on Brazil’s household employment survey, and primary transfers, Montero finds that labor income is up 1.8 percentage points over the series, while transfers have risen 3.9 points.

Over the past year and a half, though, transfers have been flat relative to GDP, while labor income has recovered ground lost during the pandemic, Montero said. Even so, consumption has not kept up. One possibility, he said, is that part of the extra post-pandemic income is being saved, mirroring lower public-sector savings.

Another possibility comes from credit data. Deteriorating indicators such as defaults, indebtedness and debt-service burdens may suggest that the additional income is being absorbed by interest payments, Montero said.

Santander sees the same tension. Real income is still growing at a strong 5% pace, which should normally translate into a clearer improvement in families’ sense of financial well-being, said Ana Paula Vescovi, chief economist at Santander Brasil. But total debt payments, including interest and amortization, are rising almost 12% in real terms. As a result, income left over after debt service is growing much more slowly, at just 2.4%.

Margato says there is still no strong macro evidence that households are channeling extra income into savings. “There has been more financial investment and more capital-market exposure among some groups, especially higher-income households. But from a macro standpoint, we do not see evidence of a broader increase in savings,” he said.

In his view, part of the gap between income and consumption can be explained by heavier debt burdens. “Looking more broadly, in an environment of restrictive interest rates and higher debt levels, we have seen a larger share of income being tied up, in other words, a more significant portion going to debt service,” he said.

The share of household income committed to debt service hit a record in the Central Bank series, which began in 2005, when it reached 29.3% in October last year. It was still 29.2% in December, the highest year-end reading on record, and returned to 29.3% in January.

Household indebtedness relative to income over the previous 12 months also ended 2025 at a yearly peak of 49.7%. On a monthly basis, that was second only to the 49.9% seen in July 2022.

“Even adjusting for delinquency, households are devoting a larger share of income to servicing debt and paying interest,” Margato said. “That is an important part of the explanation for slower consumption despite strong income gains. But it is only part of the story. It does not fully add up yet. There is still something here that we do not fully understand.”

Jobs weight

Montero points to another possible explanation: income has been rising less because more people are working and more because those already employed are earning higher wages.

“Each new source of income gives a household more confidence and gives banks more collateral. In that sense, a new income source is more than just additional income,” he said. “When someone gets a job, they gain access to credit.”

Citi Brasil raises a similar point. Its models suggest consumption is about three times more sensitive to job growth than to real wage gains. The bank’s team, led by Leonardo Porto, notes that household consumption rose 1% in the fourth quarter of 2025 from a year earlier, less than overall GDP growth of 1.8% and far less than the 6.4% increase in the total wage bill. In Citi’s view, that is because consumption responded more to the 1.1% rise in employment than to the 5% increase in wages themselves.

Lin also points to still-high prices, a source of discomfort captured in Genial/Quaest surveys. “That may be part of the reason consumption is not stronger. Inflation may be behaving better, but we are not talking about deflation. Prices have stopped accelerating, but there has been no real restoration of purchasing power since the end of the pandemic,” he said.

The accumulated hit to household budgets has come mainly from essentials such as electricity and food, he said. “There is no way around those expenses, and they squeeze disposable income. If you spend more on essentials, there is less left for discretionary consumption.”

Spending recover

Whatever is behind the gap between income and consumption, Montero says one question remains. If the sharp rise in household income is no longer enough to support both debt service and consumption because of the lagged effects of high interest rates, what happens when that income growth, heavily supported by a labor market with little autonomy of its own, another round of unsustainable fiscal stimulus and slower inflation, starts to lose momentum?

Margato believes household consumption can still pick up in 2026. “Our working assumption is that the gap between income and consumption narrows back toward its historical average,” he said.

That view rests on the resilience of both the labor market and credit, which he says was already visible in January data.

He also points to a package of government stimulus measures that should support demand in the near term. XP estimates that together they could add 0.9 percentage point to GDP. That estimate uses conservative assumptions, Margato said, such as R$15 billion in home-renovation credit, even though the government says as much as R$40 billion could be made available.

“There are arguments that the effect may be more limited precisely because households are more indebted and may also behave more cautiously in an election year, especially when it comes to durable goods. I understand those arguments. But we are still talking about an impact of nearly 1 percentage point of GDP, against the backdrop of a resilient labor market. Under those conditions, it is hard to see consumption not picking up again,” he said.

XP forecasts household consumption growth of 1.9% in 2026, close to its 2% forecast for overall GDP.

Genial is even more optimistic, projecting household consumption growth of 2.5% this year while also forecasting 2% GDP growth. Lin expects unemployment to move toward 6.1% by year-end, still well below the 7.7% “natural” unemployment rate his firm estimates for Brazil.

“We will still have a very tight labor market, and that will keep pressure on wages,” he said.

He expects the real wage bill to grow 4.5% on average in 2026, or 4.7% by year-end, equivalent to roughly 8.5% to 9% in nominal terms. “We are once again talking about a year of strong consumption growth, and that is one of the pillars of our economic scenario,” he said.

Even so, he acknowledges that the recent stagnation in household spending is a risk. “If consumption continues to show no reaction, especially with these stimulus measures and the higher minimum wage, and if that does not appear in first-quarter growth, we will inevitably have to revise our GDP forecast,” he said.

*By Anaïs Fernandes   — São Paulo

Source:Valor International
https://valorinternational.globo.com/
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Oil stocks diverge despite crude surge

Brent jumps on Middle East war, but Brazilian oil companies react unevenly as business models and policy risks shape returns

 

 

 

The sharp rise in oil prices during the war in the Middle East did not translate evenly into share prices of oil companies listed in Brazil. Although Brent climbed nearly 62% in March, the effect on energy stocks in the Ibovespa benchmark index was mixed, reflecting differences in business models, exposure to international markets and the impact of government measures affecting crude exports and refining.

Companies more directly exposed to production and exports, such as Petrobras and Prio, showed a clearer link to the commodity, though far from a perfect one. Petrobras common shares rose about 26% last month, while Prio advanced 21%, according to Valor Data.

That said, Petrobras also benefited from the continued flow of foreign capital into emerging markets. Brava Energia and PetroReconcavo lagged behind, with gains of 10% and 13%, respectively, held back by different operating characteristics and lower direct sensitivity to the rise in international oil prices.

The divergence also reflects company-specific factors that go beyond Brent’s swings. In Prio’s case, for example, most of its revenue is tied to exports and oil prices, and the company also has its own catalysts drawing investor attention, said Caio Borges, an analyst at Eleven Financial.

One is the recently approved license for the Wahoo field, with initial production of 12,000 barrels a day and expected output of 40,000 barrels a day by the end of April.

Squeezed margins

Petrobras operates under a different logic from the other companies. A significant share of its revenue comes from refining, where margins do not always move in line with Brent. That is because the state-controlled company’s pricing policy takes other factors into account besides crude prices, which leads to less frequent adjustments.

“In practice, when Brent rises and oil products are not immediately repriced, refining margins get squeezed, which limits the positive effect of higher oil prices on the company’s performance,” Borges said.

Although optimistic about Prio’s production growth, Henrique Lara, a portfolio manager at Reach Capital, said the recent 12% tax on crude oil exports weighs on the company. The measure, adopted by the government to help fund subsidies and contain fuel prices, was introduced alongside a 50% tax on diesel exports.

Brava is also among the companies most affected, since it exports about 40% of its production. At the same time, the company has a hedging structure that significantly reduces gains generated by higher Brent prices, which helps explain its weaker stock performance.

Rethinking exposure

Even so, the outbreak of the conflict prompted local asset managers to reassess portfolio risk. Before the war, many firms had little appetite for oil exposure because the consensus view was that supply and demand would be out of sync as the market moved from the first to the second quarter. But the price surge led to a significant increase in allocations to oil producers.

At Reach Capital, exposure to the sector was tripled, though the firm did not disclose numbers. According to Lara, the firm already believed the conflict would last longer than the market was pricing in, even if the Strait of Hormuz, which handles about one-fifth of global oil flows, were reopened. For that reason, part of the portfolio was shifted into oil companies, though the portfolio remains diversified.

Lara cut positions more exposed to the economic cycle and increased exposure by 10% to global oil companies and international fertilizer producers.

“Even if the war ends, the geopolitical premium will remain and will not immediately return to zero. A meaningful volume of oil has been taken out of the market, and the alternatives to offset that loss are limited,” he said.

No simple pattern

A study by Quantum shared exclusively with Valor shows that Brent and Petrobras stock prices do not always behave in tandem during geopolitical conflicts. During the Arab Spring, Petrobras preferred shares tracked the rise in oil from December 2010 through April 2011, but that correlation broke down from then until 2013. During the Israel-Hamas conflict between 2023 and 2025, the pattern was different: oil fell while Petrobras shares rose.

That historical asymmetry helps explain the current backdrop. In 2026, oil remains volatile, reacting mainly to signals from Iran and the United States. Even so, the average price level is already above what had initially been expected for the period, even under a truce scenario, said Guto Leite, equity portfolio manager at Franklin Templeton.

So far this year, oil has averaged between $75 and $80 a barrel, about $10 above the firm’s prewar projections, when the market expected demand to slow. “That is positive for Petrobras and Prio. Even with oil at $70, the floor should be higher and the geopolitical premium is likely to last longer.”

Before the war, Leite had less exposure to oil companies than the market average. Today, the portfolio is more defensive, with positions in Prio and Petrobras and reduced exposure to assets more sensitive to the economic cycle.

“The view is that April is a crucial month. With each additional week of conflict, the deterioration is not linear, it is exponential. The risk is not just in oil, but across the whole chain: oil products and even fertilizers. The downside scenario is so adverse that the market ends up clinging to any positive signal to sustain the rally,” he said.

*By Maria Fernanda Salinet — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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