NEWSLETTER

June 2026

 

 

06/01/2026

BANKS, PIX FACE RISKS FROM U.S. MOVE AGAINST GANGS

Designation of PCC and CV as terrorist groups could reshape compliance rules, expose Brazilian companies to scrutiny, and add strain to bilateral ties

 

The U.S. decision to classify criminal factions Primeiro Comando da Capital (PCC) and Comando Vermelho (CV) as terrorist organizations could affect Brazil’s business environment and the national financial system, including Pix, the instant payments platform created by the Central Bank.

 

The U.S. move has raised the alert level at banks and fintechs, which will need to review compliance policies and could face higher costs. It has also raised questions about possible consequences for companies in other sectors of the economy and for individuals, who could become targets of discretionary, or arbitrary, action by Donald Trump’s administration, according to experts interviewed by Valor.

 

The United States could also use the designation of PCC and CV to tighten the issuance of U.S. visas to Brazilians, although such a move is not expected to become a general rule given the economic nature of immigration decisions, said Fabiano Rocha, a data scientist and immigration specialist who is CEO and founder of Jumpstart.

 

“Any restrictive measures would not be sustained for very long because of the mutual economic dependence between the two countries. The migration market is very resilient, and the force that drives it is economic,” he said.

 

The U.S. decision also raises questions about the impact on Brazil-U.S. relations, especially in the exchange of information involving police investigations.

 

The issue is that the terrorist designation moves the criminal groups out of the strictly police sphere of security and into a more rigorous national defense framework, Lincoln Gakiya, a São Paulo state prosecutor considered Brazil’s leading authority in the fight against PCC, told newspaper O Globo.

 

Intelligence agencies

 

From that standpoint, the immediate impact of the U.S. initiative lies in the change in the profile of the U.S. agencies with which Brazil is likely to cooperate, said Thiago Bottino, a law professor at Getulio Vargas Foundation (FGV) in Rio de Janeiro.

 

Under the new definition, investigations related to PCC and CV would no longer be led by agencies focused on combating drug trafficking, such as the U.S. Drug Enforcement Administration (DEA), or by the Department of Justice (DoJ). Instead, they would involve intelligence and counterterrorism agencies such as the CIA and the FBI’s counterterrorism division.

 

Gakiya told O Globo that this point worries him, because information-sharing is currently agile and that flow could be impaired. In some cases, U.S. authorities could invoke secrecy and stop sharing information with their Brazilian counterparts.

 

Bottino, from FGV, considers the new classification inappropriate, since agencies such as the CIA “are focused on understanding and combating a phenomenon that is different from the phenomenon of a criminal organization, which sells drugs and controls territories.”

 

“A terrorist organization does not want to dominate or invade territories, as PCC and CV do,” he said. Terrorist organizations have political, ideological, or religious motivations, experts say. PCC and CV, by contrast, have an economic purpose: making money from illegal activities.

 

Analysts also see the classification as having the potential to influence Brazil’s public debate, with possible effects on this year’s elections. The State Department announced on Thursday (28) that PCC and CV would be listed as terrorist organizations, a measure that takes effect on Friday (5).

 

The designation followed a visit by Senator Flávio Bolsonaro (Liberal Party, Rio de Janeiro), a presidential pre-candidate in the October election, to the White House, where he was received by President Trump on May 26. The new definition of the criminal groups is likely to be used in the campaign.

 

Compliance risks

 

In the short term, companies and the financial system in Brazil are trying to understand the effects of the measure. Experts say the designation could broaden the reach of U.S. authorities over activities carried out in Brazil and expose Brazilian companies to investigations, while also forcing them to improve their compliance systems. In that sense, the U.S. decision carries risk and could add costs.

 

For Leandro Piquet Carneiro, coordinator of Escola de Segurança Multidimensional (School of Multidimensional Security) and professor at the University of São Paulo’s Institute of International Relations, the risk of potential sanctions against companies could have the effect of strengthening compliance rules in Brazil, making the business environment safer and making it harder for “crime as a service” operations that involve hundreds of illegal businesses.

 

“The classification could also add a new layer to existing [bilateral] cooperation, without excluding traditional channels,” he said.

 

The measure could, however, affect companies that operate legally but at some point did business with partners linked to criminal activities without necessarily identifying that connection.

 

Bottino, from FGV, shares that view. “It is very common for these criminal organizations to infiltrate legal business activities so they can launder money from crime. And, many times, companies that do business with other companies, other funds and other managers are not aware of that. It is not that simple or easy, because they are dealing with people who want to hide that origin,” he said.

 

He continued: “These companies that at some point may have done business with others that could be related to criminal activity are subject to losing their bank accounts [in the U.S.], having their accounts frozen, facing investigations, eventually being placed on lists and being prohibited from doing business in the United States and Europe.”

 

Pix and banks come under scrutiny

 

Finance Minister Dario Durigan told Globonews that the U.S. decision could harm Pix. He raised the possibility that U.S. courts could pressure banks operating in Brazil that receive payments through Pix.

 

Durigan also said costs in the national financial system could rise, since banks will need to review rules and, in some cases, adopt new compliance measures.

 

The minister also said there is a risk that Brazil could be suspected of being a territory where terrorist activities take place, which would have macroeconomic implications, including an increase in country risk and damage to the attraction of foreign direct investment.

 

In the market, however, the initial assessment was that the practical effects of the measure on domestic assets in the short term should come more through political repercussions than through an outflow of funds from Brazil or restrictions on investment in the country. Overall, financial market participants see the Trump administration’s action as negative, but not something likely to change the course of domestic markets, at least for now.

 

The Brazilian Association of Banks (ABBC), however, acknowledged that the measure could affect relationships between Brazilian and U.S. banks. The Brazilian Association of Fintechs (ABFintechs) said the U.S. government’s action has direct and immediate impacts on the sector.

 

New pressure

 

Oliver Stuenkel, a senior fellow at the Carnegie Endowment for International Peace in Washington and fellow at the Harvard Kennedy School’s Belfer Center, said the U.S. decision changes how Brazil is perceived and introduces a counterterrorism and Pentagon-related dimension into the bilateral relationship, something that, in his words, “was not part of the relationship between the two countries.”

 

“This will also require an adjustment in how Brazil deals, from now on, with this issue of combating terrorism. This is an issue the government will have to face,” said Stuenkel, who is also a professor of International Relations at FGV in São Paulo.

 

Piquet Carneiro, from USP, believes the long-standing bilateral relationship between the two countries may still prevail. He pointed to the Foreign Affairs Ministry’s initial silence as an indication of the careful analysis Brazil is conducting in the face of this new reality.

 

“Brazil and the U.S. have a long-standing relationship, with established channels of cooperation in defense, security and criminal justice that are crucial for both countries. It is a channel that is open all the time, and Brazil is very important to U.S. strategies,” he said.

 

But he cautioned that the classification could also be used in a discretionary way, considering President Trump’s nature, and could even lead to controversial actions against politicians or individuals.

 

Along similar lines, researcher Vitor de Pieri, a professor at UERJ’s Institute of Geography, said the measure is part of a broader strategy to expand the U.S. security agenda in Latin America in a context of global geopolitical dispute and the region’s growing strategic importance.

 

Looking at precedents, Pieri cited Plan Colombia, implemented in the South American country in the late 1990s under the argument of fighting drug trafficking and armed groups, but which also expanded the U.S. presence in South America through military cooperation, intelligence and financial assistance. In his view, both the war on drugs and the fight against terrorism show how security agendas are linked to broader geopolitical interests.

 

The risk of diplomatic strain, according to the UERJ professor, grows if the measure is used as an instrument of political pressure on Brazil. In that scenario, issues such as border control, the Amazon, critical infrastructure and mineral resources could be folded into a broader logic of hemispheric security.

 

“The main debate for Brazil is not only the fight against organized crime, but the preservation of its autonomy to define how to confront this problem,” Pieri said. “Although the measure targets specific criminal organizations, its effects tend to go beyond the sphere of public security and reach the business environment and the financial system.”

 

Visa policy

 

The designation of the two criminal factions also allows the United States to tighten the issuance of U.S. visas to Brazilians. However, Rocha, the data scientist and immigration specialist, said the new classification should not lead to broad-based changes. He based his assessment on what he sees as the “economic nature of U.S. immigration decisions.”

 

According to Rocha, the United States has a growing need for workers, and Brazil is one of the exporters of skilled labor to U.S. territory, surpassing even other Latin American countries such as Mexico. Even in tourist visas, he said, the rejection rate for Brazilians ranges from 15% to 20%, influenced by Brazil’s Human Development Index (HDI) and per capita income.

 

Source: Valor International

https://valorinternational.globo.com/

 

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06/01/2026

 

MINING COMPANIES IMPROVE CAPITAL MANAGEMENT

The BCG study says companies are generating more cash and paying higher dividends

 

Global mining companies are no longer being seen only as great companies, but also as great stocks. That is the assessment of Boston Consulting Group (BCG), based on an analysis of the performance of 87 companies around the world—including Brazil—summarized in the study “Great Company, Great Stocks: Miners Must Be Both,” obtained by Valor.

 

“What we have seen in mining as a whole is that companies’ fundamentals are stronger, capital allocation has also improved, and what they pay shareholders has increased. Companies are generating more capital,” says Lucas Zuquim, a partner at BCG in Brazil, based on the study, which takes into account the performance of mining companies and their shares over the past decade.

 

As large companies, mining firms have begun generating significantly higher free cash flows, reducing leverage, and stabilizing their exploration budgets, the study says. In some cases, they have also adopted a more consistent, less cyclical approach to mergers and acquisitions.

 

Investor returns, according to Zuquim, are measured in the study using total shareholder return (TSR). The metric takes into account share appreciation on the stock exchange, dividends paid, and interest on equity—in other words, everything shareholders receive. According to BCG, mining companies’ TSR has accelerated globally over the past five years to levels close to those of the building materials and machinery sectors and slightly above those of the oil and gas and metals sectors.

 

Also according to the study, the sector’s free cash flow generation has shown a clear structural improvement over the years. Annual volume rose to $80–$90 billion in the mid-2020s, up from less than $40 billion in the late 2000s. These levels are 1.5 to 2.5 times higher than those recorded in equivalent commodity price cycles observed 15 or 20 years ago. “Although the evolution of production volumes influences the absolute figures, the observed jump points unequivocally to a financially healthier industry.”

 

Companies’ use of cash has changed considerably over the past 20 years. Between 2005 and 2008, mining companies spent 46% of cash generation on investments in assets and production, a share that rose to 49% between 2021 and 2025 (the 2025 figure considers the 12 months ended in September). Cash acquisitions, which accounted for 25% of cash allocation from 2005 to 2008, fell to 5% over the past four years. Shareholder remuneration through dividends rose to 35% of cash between 2021 and 2025 from 17% in the early years of the survey. Share buybacks, on the other hand, which once represented about 50% of dividend volume, now account for less than 15%.

 

According to Zuquim, companies have improved cash generation and reduced leverage. Yet some investors still do not see mining companies as core long-term investments. “Some still see mining as a cyclical business.” The commodities boom driven by China in the early 2000s left a mark on the sector. “They invest, wait for ore prices to rise, and then sell,” he says.

 

Zuquim, however, says that some companies have disciplined capital management, with merger and acquisition investments not correlated with commodity prices. One example is the copper subsector. To move forward, he says, companies should improve capital allocation and plan long-term acquisitions. “In other words, have a more consistent long-term track record.”

 

Among the companies included in the study, 10% are Brazilian. Vale is a good case. For Zuquim, the mining company is one of the best examples reinforcing the BCG study’s analysis. “The company’s fundamentals have improved significantly over the past three years. Leverage has fallen, and shareholder remuneration has increased. Vale is delivering on its production guidance and even exceeding it,” he says, referring to the forecasts the company periodically provides. “It is a clear example of how companies are improving business metrics and financial metrics. And the shares are following that movement,” he says.

 

The company is closely followed by analysts at investment banks and brokerages. According to data compiled by MarketWatch, a tool that tracks companies’ stock-exchange performance, 27 international analysts monitor the mining company’s data. Among this group, the average recommendation is “buy” for the American Depositary Receipts (ADRs) traded in New York, with an average price target of $17.57. The shares closed yesterday at $16.50.

 

As Zuquim noted, Vale released its projections shortly after publishing its first-quarter earnings. On May 12, it announced that recent changes in market conditions, driven by the conflict in the Middle East, will positively impact its results. The mining company estimates an increase of approximately $1.5 billion in free cash flow for the year in its iron ore unit, supported mainly by a projected $1.2 billion increase in the segment’s EBITDA (earnings before interest, taxes, depreciation, and amortization) and by $425 million generated from foreign-exchange and fuel hedging programs.

 

Another example cited by BCG is CSN Mineração. “It improved cash flow and is investing in a new concentration plant.” In addition to CSN Mineração, Zuquim mentions Canada’s Aura Minerals, a gold and copper mining company whose securities are traded on B3. It is a younger company, he says, but it is also delivering to the market what it has forecast. Globally, Zuquim lists giants Rio Tinto and BHP as the most “relevant” mining companies that have improved capital allocation.

 

To consolidate their role as “great stocks,” mining companies must advance on two main fronts, according to BCG. “The first is resetting capital allocation parameters based on mid-cycle economics—especially urgent for precious metals companies and copper producers exposed to market euphoria,” the study says. “The second is developing clearer, investor-centered equity narratives, with quantified commitments to margin expansion, ROCE [return on capital employed] improvement, capital-efficient production growth, and more resilient cash generation throughout the cycle.”

 

Source: Valor International

https://valorinternational.globo.com/

 

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06/09/2026

 

NISSAN EYES ELECTRIFIED PRODUCTION IN BRAZIL AS TARIFFS RESHAPE SECTOR

Automaker plans new models, explores partnership with China’s Dongfeng while calling for stronger protection of local manufacturing

 

 

For Christian Meunier, CEO of Nissan Americas, raising import tariffs to protect local industry—as seen in the United States—is an irreversible trend worldwide. As a result, while the automaker prepares to launch five imported cars in Brazil over the next 18 months to accelerate its electrified-vehicle offering, it expects to decide within three to four months which model will be its first electrified vehicle produced in Brazil. The plans also include discussions with Dongfeng Motor Corporation, Nissan’s partner in China, regarding a potential agreement to share production capacity at Nissan’s plant in Resende, Rio de Janeiro state.

 

Considering projects with Dongfeng in Brazil does not mean Meunier supports the easy entry of Chinese automakers into the Brazilian market. On the contrary, he strongly criticizes vehicles produced in China that, according to him, enter the country at low prices “thanks to dumping practices.” “Many subsidies are not reflected in vehicle prices,” he said. The executive argues that the Brazilian government should protect the domestic automotive industry to avoid what he described as a potential “collapse” of the sector.

 

“The local industry needs greater support than imports because Brazil is not a low-cost country,” Meunier told Valor. In his view, raising import tariffs on hybrid and electric vehicles to 35% beginning in July will not be enough.

 

He noted that Mexico is preparing to raise tariffs to 50% and pointed to similar protectionist measures in Europe and Canada. In the United States, tariffs on Chinese-made vehicles are 100%. According to Meunier, however, the main barrier is not the tariff itself but rather a “national security policy” focused on the use of locally produced batteries and software.

 

Despite advocating stronger protection for local manufacturing, Meunier acknowledges that Chinese automakers “move quickly.” That reality requires competitors to make faster decisions, often before a detailed local production plan is in place. “There is work underway to bring a third product, an electrified model, to be assembled in Resende,” he said.

 

“My goal is to find a new baby for Resende,” Meunier joked, referring to Nissan’s manufacturing complex in Rio de Janeiro state, which currently produces two SUVs: the new Kicks and the Kait, launched in July and December 2025, respectively. The decision regarding the third model will be made within three or four months, he said.

 

However, there is no timetable yet for implementing a potential cooperation agreement with Dongfeng in Brazil. If completed, Nissan would become the fifth automaker in the country to open factory capacity to Chinese manufacturers. Renault, Stellantis, HPE Automotores, and Jaguar Land Rover have already made space available at their Brazilian facilities for production of Chinese brands or joint projects involving Geely, Leapmotor, GAC, and Omoda & Jaecoo, respectively.

 

“Dongfeng is our partner in China, so this is an opportunity we are exploring. Among several possibilities under consideration is working with them on a solution like this. But nothing has been decided. We will do things together, but we are not disclosing details because some points still need to be finalized,” Meunier said. Nissan is also negotiating cooperation agreements with Chinese partners in the United Kingdom.

 

Meanwhile, the company is preparing the arrival of imported models in Brazil. The large SUV X-Trail will be the first of the five launches announced by Meunier through the end of 2027. The vehicle, Nissan’s first hybrid model to be sold in Brazil, will also introduce to the Brazilian market a hybrid technology already used by the company globally.

 

Known as e-Power, the system allows a hybrid vehicle to be driven entirely by electric propulsion at all times without the need for external charging. An internal combustion engine serves only to generate electricity for the battery that powers the electric motor.

 

The new product launches represent an important step for Nissan, which currently holds just over 3% of Brazil’s vehicle market, as it seeks to increase market share. Production planning would follow. “We need to understand how we can bring in a new product that can also be localized and assembled in Brazil. We cannot rely solely on imports. That does not work in the long run.”

 

Since taking over as head of Nissan Americas in January 2025, the French executive has overseen an increase in vehicle production in the U.S. following the announcement of higher import tariffs by President Donald Trump. Within 18 months, the share of locally produced vehicles in Nissan’s U.S. sales rose from 44% to nearly 65%. According to Meunier, the target is to reach 80% by the end of the decade. The expansion of local production required a reorganization of manufacturing operations in Mexico and Japan, which began supplying vehicles to Canada.

 

Exports from the United States to Canada, which had been disrupted after tariffs were raised to 25%, have recently started to recover. “Volumes are still small because margins remain under pressure. But we need the product. We do not want to lose customers in Canada who need the large vehicles produced in the United States,” he said.

 

Living with higher tariffs does not mean conflict with the U.S. government, according to Meunier. “We do not need to fight the government. We are a large company. We have to work with what we have and with what the government is telling us to do. In Brazil, we have to do the same.”

 

According to the executive, the business community has already realized that tariffs are here to stay, regardless of changes in government. “When you have tariffs of 25% or even 15%, it becomes very difficult to remove them when governments need the revenue. The Democrats did not eliminate the tariffs introduced during Trump’s first administration,” he noted.

 

Asked how industrial protection policies might evolve after Brazil’s next presidential election and amid relations with China, Meunier said: “I think what matters for the Brazilian people is preserving jobs and maintaining a strong industrial base, regardless of whether the right or the left wins.” In his view, domestic vehicle production will remain “a key success factor in the United States, Mexico, and Latin America” over the next decade.

 

Nissan’s Brazilian operation, which is now preparing to expand its lineup with new models, emerged unscathed from the company’s recent global restructuring, which included layoffs and factory closures, including in Mexico and Argentina. The restructuring plan was primarily focused on reducing costs.

 

Source: Valor International

https://valorinternational.globo.com/

 

 

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06/12/2026

 

CENTRAL BANK RULES BEGIN OVERHAUL OF BRAZIL’S CRYPTO MARKET

Higher regulatory costs may reduce license applications and accelerate consolidation among virtual asset service providers

 

The Central Bank’s new regulation for virtual asset service providers has already started reshaping Brazil’s crypto market as the deadline approaches for companies to apply for authorization.

 

Companies in the sector are reviewing their structures, recalculating costs, and assessing whether they will have enough capacity to operate with their own license or whether they will need to team up with larger players to continue offering services in the country.

 

The deadline to apply for a license ends in late October. Until then, companies involved in intermediation, custody, infrastructure, tokenization, or other services linked to virtual assets will have to decide which business model they will follow under the country’s new regulatory framework.

 

Industry executives say the regulation provides legal certainty and tends to raise governance standards, but it also imposes a more expensive and complex transition than part of the market had expected. The main concern is the increase in regulatory costs.

 

For virtual asset service providers, known as VASPs, the new minimum capital requirements range from about R$10 million to R$37 million, depending on the activity. Before the Central Bank published the final rules, industry sources estimated that between 150 and 200 companies could seek authorization.

 

The current forecast is that not much more than 50 companies will file applications. Some companies are expected to seek partnerships, operate through licensed structures, assess mergers and acquisitions, or reduce the scope of their activities in the country.

 

Costs drive consolidation

 

For Julia Rosin, CEO of the Brazilian Association of Crypto Economy (ABcripto) and policy manager for Latin America at Coinbase, the sector already expected regulation to arrive, but some of the requirements ended up far from the expectations formed during the public consultations.

 

“Everybody knew the rules were coming, since we had public consultations. What happened were two things: some items came out very different from what emerged from the consultations, and problems were identified when companies started implementing the rules internally,” she said.

 

Rosin said the increase in regulatory costs has led companies to seek alternatives to make market entry cheaper, whether through the hiring of third parties, internationalization, mergers, or the sale of operations.

 

“You end up creating layers of complexity in the provision of a service because of the demand created by regulatory costs,” she said.

 

According to people familiar with the matter, the trend is toward concentration. Smaller companies are considering seeking investors, selling portfolios, signing agreements with larger companies, or operating through licensed structures.

 

At the same time, companies with more capital have begun strengthening areas such as compliance, risk, internal controls, regulatory legal teams, technology, cybersecurity, and auditing. Industry sources also report a shortage of professionals who combine experience in the regulated financial market with technical knowledge of blockchain and virtual assets.

 

Technology infrastructure has also become another focus beyond staffing. Companies report doubts about certifications, audits, security tests, contingency plans, and system validation.

 

Support structures

 

According to João Dunin, chief operating officer of Z.ro Bank, domestic and international exchanges have been looking for providers capable of offering infrastructure for Pix, Brazil’s instant payment system,, individualized accounts, segregation of funds, compliance, know your customer (KYC), procedures, and reporting to the Central Bank. “You regularize the crypto side, but there are also many little legs in the traditional fiat world,” he said.

 

Dunin said some companies are trying to avoid having to build a full local operation only to handle payments and regulatory obligations. “You will focus on your business. Your business is crypto. Pix transfers, reporting to the Central Bank, that stays in-house,” he said.

 

Dunin said he has noticed an increase in demand for this type of structure since the regulation was published. According to him, companies began reviewing their models before the final deadline to request authorization.

 

“We have a deadline. That deadline is October 29,” he said. “The Central Bank is defining the form of the audit, how it will work, evidence and so on. But to audit an exchange operation, it will take two months, maybe three, depending on the level of the audit.”

 

Among the points that still raise questions among companies in the sector are how information should be reported to the regulator, transition rules for certain services, requirements linked to certifiers, and integration with already regulated structures such as Pix.

 

For ABcripto, delays in resolving these issues could also affect the regulator itself.

 

“The longer they take to give these answers, the later people will apply. So they will have an overload of applications,” Rosin said.

 

Central Bank rules out step-by-step manual

 

On the Central Bank side, Gustavo Martins dos Santos, a representative of the Financial System Regulation Department said in an interview with Valor in early April that there will not be a detailed manual to guide companies through each step.

 

“There will be no manual. The rule sets out what is required in an open way, and we will deal with it case by case,” Martins dos Santos said.

 

He also said the required certification and controls help give the regulator greater confidence that companies seeking to operate in the market have minimum requirements in place.

 

“The problem when someone enters the market is this: they enter, but removing them is difficult. The administrative cost for society of removing someone from the market is very high,” Martins dos Santos said.

 

Even among sources critical of the transition design, there is consensus that regulation is necessary. The Central Bank’s entry is expected to raise standards for anti-money-laundering prevention, governance, information security, and accountability.

 

The risk raised by industry participants is that the pursuit of greater security may reduce the diversity of business models and accelerate market concentration.

 

Source: Valor International

https://valorinternational.globo.com/

 

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06/12/2026

 

MEAT INDUSTRY SEEKS BROADER BAN ON ANTIMICROBIALS

Request comes after European Union removed Brazil from list of countries authorized to export animal products to the bloc

 

Brazil’s meat industry has asked the Agriculture Ministry to expand restrictions on the use of antimicrobials in the country, according to letters sent to the ministry on Thursday (11) and reviewed by Valor. The request comes in response to the European Union’s decision to remove Brazil from the list of countries authorized to export animal products to the bloc starting in September. The move is intended to signal to European authorities a stricter stance on the use of such products in animal production chains.

 

The Brazilian Animal Protein Association (ABPA) requested that the ministry ban the use of enramycin, avilamycin and flavomycin in the poultry sector. The measure would expand a rule introduced in May covering phosphonic acid derivatives, including fosfomycin.

 

In the beef sector, the Brazilian Beef Exporters Association (Abiec) asked the government to extend restrictions to the molecules sodium monensin, salinomycin, lasalocid and narasin.

 

In April, the ministry published a regulation prohibiting the import, manufacture, commercialization and use of performance-enhancing additives containing avoparcin, bacitracin, zinc bacitracin, bacitracin methylene disalicylate and virginiamycin. The Agriculture Ministry did not respond to requests for comment.

 

The industry groups stressed to the ministry that the request comes amid ongoing discussions with the European Union regarding requirements related to antimicrobial use in animal production, which are set to take effect on September 3.

 

In the letters, ABPA and Abiec said that although the European decision is linked to proof of official inspection and control mechanisms ensuring the non-use of such drugs in animal production, expanding the prohibitions could “strengthen Brazil’s regulatory position, support efforts led by the federal government with European authorities and demonstrate the country’s commitment to the principles of prudent antimicrobial use and one health.”

 

In a statement to Valor, ABPA and Abiec confirmed that the letters had been sent. “The initiative aims to support Brazil’s regulatory harmonization efforts with international standards and strengthen the country’s position in ongoing discussions with trade partners, especially the European Union,” the associations said.

 

Source: Valor International

https://valorinternational.globo.com/

 

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06/18/2026

 

CENTRAL BANK MAY SLOW CUTS AFTER LOWERING SELIC TO 14.25%

Economists say reference to 2028 inflation horizon raised doubts about next steps of Brazil’s Monetary Policy Committee

 

 

Brazil’s Central Bank cut the Selic base rate by 25 basis points to 14.25% at its Monetary Policy Committee (Copom) meeting on Wednesday (17), but the accompanying statement raised questions among economists about the authority’s next steps.

 

As Valor had reported earlier in the week, most financial-market participants expected the rate cut. What they did not expect was a statement referring to the quarter after the so-called “relevant horizon,” the period the Central Bank uses as a benchmark for its decisions and that reflects the time needed for monetary policy to take effect. That horizon had been the fourth quarter of 2027, but the statement mentioned the first quarter of 2028.

 

“It is commendable to work with an alternative scenario, but if the Central Bank usually looks at the relevant horizon, why does it mention the following quarter? In practice, the authority extended that horizon. This raises the question of whether the relevant horizon is now the one that allows it to cut rates,” said Gino Olivares, chief economist at Azimut Brasil Wealth Management. “It is contortionism to be able to continue cutting [the Selic].”

 

Paulo Val, chief economist at Occam Brasil, raised a similar point. In his view, the extension of the inflation-convergence horizon comes at a time when the monetary authority should be more “cautious.” “The Central Bank should shorten the convergence horizon, not extend it. By signaling that it may be looking further ahead [than it should], it may contribute to a deterioration of longer-term horizons,” he said.

 

Luciano Sobral, chief economist at Neo Investimentos, said the Central Bank is moving away from a model to which it had tied itself in the past and that is now creating problems for the authority. “I just don’t know how it will get out of this trap,” he said, adding that this departure from the model is likely to create noise among financial-market participants. “The market demands a lot of consistency and adherence to the model, and this deviation by the Central Bank will bring it a lot of criticism,” he said.

 

Laiz Carvalho, Brazil economist at BNP Paribas, sees it differently. She said expanding the relevant horizon was more of an “attempt to signal what may happen in 45 days, assuming the alternative scenarios.” “I don’t think the fact that it talked about the first quarter of 2028 now means it can talk about that all the time. I think it did this to show that the door is more closed to a 25-basis-point cut than before,” she said.

 

Door left open

 

The statement did not give firm guidance on future decisions, leaving the door open to further cuts amid unanchored expectations and the inclusion of fiscal stimulus to consumption in the balance of risks for higher inflation.

 

Copom therefore stressed that its next steps will depend on “new information.” It also said uncertainty around the projections remains higher than usual. For the relevant horizon of the fourth quarter of 2027, the Central Bank’s IPCA inflation forecast rose to 3.7% from 3.5% in the previous statement.

 

On the projection, Carvalho said it would be important for the Central Bank to explain in next week’s minutes how it arrived at 3.7%. “Taking into account the relevant horizon of the fourth quarter of 2027, our inflation forecast is 3.6%. This shows that the Focus survey projection for the Selic, at 13.75% this year and 12% in 2027, is not enough to bring inflation to the target,” she said. “I need an alternative scenario above Focus to get close to convergence to the target,” she said.

 

Sobral said Copom is showing that the scenario has worsened, but that there is still room to cut rates. “What the Central Bank is indirectly communicating is that the interest rate is very high and that it is very far from the neutral rate, so it can accommodate a clearly worse scenario,” he said. “But the postwar world has become more complicated. Even if oil falls back below $80 a barrel, inflation expectations are unlikely to improve,” he said.

 

Olivares also sees the scenario with greater concern, especially because of a more conservative Federal Reserve. “In this globalized world, how can you be out of step with the [interest-rate] cycle of the largest economy without seeing your currency lose value?” he said, referring to the fact that a smaller interest-rate differential tends to pressure the exchange rate, while a weaker real would add another source of inflationary pressure. “There was a very clear surprise in the United States at this meeting, with the Fed proving more cautious than expected.

 

“If it is more conservative, we have to recognize our insignificance as a small economy,” he said. “The Central Bank can argue that the level of interest rates is very restrictive. But then why is inflation still above the target and activity still strong? Something does not add up.”

 

Case for a pause

 

Val said the current scenario would be consistent with the end of the easing cycle. “We are seeing the economy grow and real income gains. Inflation is also deteriorating in a real way. These levels are incompatible with meeting the target.”

 

According to Val, Copom’s tone was confusing, and the decision was not strong enough to contain the deterioration in expectations. “A stronger signal would have been that the most likely scenario is for interest rates to remain stable at this level. But the Central Bank did not want to provide direction.”

 

Source: Valor International

https://valorinternational.globo.com/

 

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06/18/2026

 

WORLD CUP HAS LIMITED IMPACT ON BRAZIL’S INFLATION, STUDY FINDS

Price increases linked to major sporting events are concentrated in a few categories, typically fade as tournaments end

 

Prices for lodging services, parking, and some food products may rise during major sporting events such as the FIFA World Cup and the Olympic Games, but the effects generally do not persist beyond the duration of the competitions, according to a study by Warren Investimentos.

 

According to Andréa Angelo, the firm’s inflation strategist, such events may add roughly 0.05 percentage point to Brazil’s headline inflation rate. Food prices account for 0.01 percentage point of the effect, while industrial goods and services each contribute about 0.02 percentage point.

 

“The impact exists, is statistically robust for certain items, and is consistent with the temporary increase in demand associated with tournaments. Even so, it is diluted within the aggregate index and does not have a permanent nature, suggesting that the effects on Brazilian inflation tend to be limited to the period of the event,” the study said.

 

To reach its conclusions, Angelo analyzed the behavior of items included in Brazil’s Extended Consumer Price Index (IPCA) during FIFA World Cups and Olympic Games held since 2010. Using statistical models, she calculated coefficients measuring each item’s sensitivity to major sporting events, their effect on prices, and their contribution to the IPCA.

 

The analysis identified statistical correlations between the events and price increases in 16 components of Brazil’s official inflation index. However, the overall impact on inflation was found to be small and temporary.

 

According to the study, some food products are among the items that tend to post the largest price increases during major sporting events. Bell peppers showed an estimated impact of 7.6 percentage points on prices, followed by cilantro at 5.1 percentage points and guava at 4.2 percentage points.

 

Angelo noted that although these products stand out statistically, it is difficult to find a logical explanation for why their prices would rise during such events. Despite the increases, these items carry very little weight in household consumption baskets and have virtually no effect on the IPCA, according to the study.

 

Among the most sensitive items, only lodging services—showing an estimated impact of 4.2 percentage points—have a measurable effect on inflation, contributing around 0.02 percentage point to the index. According to the economist, this category may be influenced by travel undertaken to visit friends and relatives to celebrate or watch matches together.

 

The survey also identified a second group of products with moderate sensitivity to major sporting events. This category consists primarily of industrial goods, including personal computers (0.89 percentage point), men’s underwear (0.74 percentage point), and jewelry (0.71 percentage point).

 

Some of these findings have more intuitive explanations. Parking services (0.60 percentage point), for example, tend to experience stronger demand as more people travel to watch games. Meanwhile, products such as fruit juice (0.49 percentage point) and cookies (0.45 percentage point) may reflect increased consumption by fans during tournaments.

 

Angelo emphasized that sporting events can influence price movements, but not enough to materially affect inflation trends or generate a meaningful impact on the IPCA.

 

She also acknowledged that the vacation season often coincides with the timing of major competitions and may influence some of the results, particularly in categories such as lodging, where demand typically increases. Nonetheless, she argued that there are no other significant factors capable of fully explaining the patterns identified in the study.

 

Source: Valor International

https://valorinternational.globo.com/

 

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06/23/2026

 

PENSION WITHDRAWALS SLOW AFTER BRAZIL’S FINANCIAL TAX CHANGE

Levy on larger private pension contributions curbed inflows, but fewer investors pulled money from plans in early 2026

 

Withdrawals from private pension plans slowed in the first months of 2026 after a new Financial Transactions Tax (IOF) started applying this year to larger contributions to Free Benefit Generator Life Plan (VGBL) pension plans. The move followed a sharp drop in inflows in the second half of 2025.

 

In January, the 5% financial-transactions tax stopped applying to annual VGBL contributions of R$300,000 or more at each insurer. It now applies only to amounts above R$600,000, based on each participant’s total contributions across the market.

 

“It shows, to some extent, that participants understand this money is indeed for the long term and that withdrawing it carries a penalty if they want to return,” said Ângela Assis, CEO of Brasilprev. “But there is no denying that the IOF hurt the sector.”

 

Rogério Calabria, head of investment and pension products at Itaú Unibanco, said the propensity to save has increased. “There is the issue of high debt, on average, across all income levels, and people are trying to rebuild some of their wealth,” Calabria said. “The war leads to that, interest rates that were expected to fall and are not falling anymore also lead to that, and there are significant uncertainties. When that happens, people hold back on spending and become more conservative in their investments.”

 

Data for the first four months from the National Federation for Private Pension and Life Insurance (Fenaprevi) show net inflows fell 7.8% from the same period in 2025, to R$6.7 billion. Contributions totaled R$54.1 billion in 12 months, down 8.3%, while withdrawals dropped 8.5% to R$47.4 billion. Through March, net inflows had grown 7.2% in 12 months, precisely because withdrawals declined 10.7%.

 

Regulatory uncertainty

 

For Fenaprevi’s president, Edson Franco, the tax has had a spillover effect even on Free Benefit Generator Plan (PGBL) plans, which are not taxed upon contribution, because of the regulatory uncertainty it created.

 

“Investors end up turning to other accumulation products. There are pension products that do, in fact, offer tax incentives for long-term retention, but Brazil has this inconsistency of offering very short-term instruments with full tax exemption,” Franco said, referring to tax-incentivized credit securities. “When clients also see a penalty at the point of entry, meaning a reduction in the nominal amount contributed, they naturally step away.”

 

Franco said the industry stepped up communication with participants and has run campaigns to attract new money, helping soften the IOF impact. “Last year, the drop in inflows reached 20%, and this year it was 8%, largely because of the effort by entities to explain who is subject to the tax.” He said he still does not have a clear read on what drove the reduction in withdrawals and that it remains to be seen whether the movement will become a trend.

 

This is an important market for the formation of long-term savings, and the industry “made a major effort for years to spread financial education and convince society to invest,” said Marcelo Flora, partner at BTG Pactual and CEO of its insurance and pension unit. He expects the government to eventually review the toll, given the contradiction of taxing those who are planning for the future at the point of entry.

 

“Those who already have accumulated resources now think twice before making a withdrawal,” said Érico Soares Neto, director of BTG Vida e Previdência. Soares Neto said inflows rose 7% this year, to R$1.08 billion, driven by a slower pace of outflows.

 

At the end of April, 11.2 million people in Brazil had some type of private pension plan, with reserves of R$1.8 trillion, equivalent to 11% of GDP. That is still limited for a relatively young industry that had been expanding year after year until it hit the brakes in the middle of last year.

 

According to data from Anbima (Brazilian Financial and Capital Markets Association), the funds that hold the sector’s reserves had posted net withdrawals of R$7.1 billion this year through June 17.

 

“We feel the lost opportunity because pensions could be performing much better if not for this aberration,” Franco said. “Taxing income is what is expected from accumulation products, with a tax incentive for the long term. That is what is done around the world, never taxation at the accumulation stage. This is a punishment for prudent behavior.”

 

Long-term appeal

 

Private pension plans have so many advantages that, depending on the situation, they are still worth considering, including for amounts above R$600,000, said Gustavo Lendimuth, a senior executive in Santander Brasil’s distribution and advisory area.

 

Lendimuth cited long-term tax deferral, the absence of so-called “come-cotas”, the semiannual advance tax charged on other pooled funds, and a rate that falls to 10% after 10 years under the regressive tax table as some of those advantages.

 

Pension plans also help simplify estate succession, without going through probate. “It is a solution for different needs: for those who want to accumulate, transfer resources or invest for the medium and long term. From five years onward, it is already advantageous.”

 

With R$484.2 billion under management at Brasilprev, Assis said the first months of the year were productive despite the IOF blow. In BB Seguros’s earnings presentation, the company that controls Brasilprev reported a 10.2% increase in pension reserves and inflows of R$3.9 billion, compared with withdrawals of R$1.5 billion in the same period ended in March 2025. Contributions rose 9% in 12 months, to R$15 billion. Recurring net income in the first quarter was R$538 million, up 51% from a year earlier.

 

For this year, the insurer projects growth of 8% to 11% in pension reserves.

 

At Itaú, the IOF on VGBL plans forced a change in strategy, Calabria said. He said the use of data technology made it more efficient to attract clients from competitors through pension plan transfers. “Now there is this need because the market has become smaller.”

 

With R$351 billion in pension assets, Itaú has also focused on PGBL, which is not subject to the IOF and is a product the bank already leads in sales and knows how to sell.

 

The product is used by taxpayers who file the full income tax return and can deduct up to 12% of taxable income, increasing their tax refund. “Our client understands it. It is an advisory product, and we have been explaining that some clients could be better allocated in PGBL than in other investments; [the client] has to reallocate, it is a benefit they are leaving on the table,” Calabria said.

 

Another front has been expanding the client base, lowering the average ticket and bringing more people into the product.

 

Calabria said the first four months were productive also because Itaú, like other peers, moved quickly to attract clients who reach the IOF limit on VGBL plans.

 

“That high-value client who has R$600,000 to allocate in the year across all insurers, we wanted to reach first.” Inflows through April reached R$4 billion, half of which came from transfers.

 

Despite the slower pace, Calabria expects the sector to grow this year, partly because high interest rates provide an organic boost to invested reserves. “The IOF has an impact, there is no doubt, but the market has not ended. The sector is rearranging itself. It will grow less than it had been growing, but it is too early to make very pessimistic or very optimistic projections.”

 

He said he still sees demand for the product, but some investors have lost interest. It has become harder to sell the product and explain the IOF, Calabria said. “There is no way not to be concerned about the rule change. It scared off some clients who think it is better not to touch this.”

 

Competition and transfers

 

Lendimuth, of Santander, said the group is gaining pension market share again this year after the IOF change. “This is a reversal that was planted,” he said. The executive said that, while clients could still contribute R$600,000 without the new tax until the end of last year, the commercial focus was on executing those contributions. Now, the effort is concentrated on transfers and retention. “It was the best first quarter for new contributions, but we planted a lot of transfers, which we will harvest in the future.”

 

He said face-to-face work by investment specialists at AAA offices has made a difference, since pension plans are predominantly consultative sales. The bank redesigned incentives, expanded its sales repertoire and improved the timeliness of information.

 

In general, insurers linked to the large banks suffer the biggest losses, but Itaú has managed to defend its ground through consultative sales.

 

In the first four months, according to Susep, Brazil’s private insurance regulator, Itaú Vida e Previdência retained nearly R$2 billion on a net basis, considering amounts accepted and ceded. Bradesco Vida e Previdência lost R$1.3 billion, followed by Brasilprev, with R$827.3 million; Caixa Vida e Previdência, with R$297 million; Zurich Santander, with R$290.5 million; SulAmérica, with R$226.2 million; and Icatu Seguros, with R$82.5 million.

 

Newer players moved in opposite directions, with BTG attracting R$1.3 billion and XP Vida e Previdência losing R$38.5 million, after being one of the leaders throughout 2025.

 

Last year, XP’s inflows were boosted by the transfer of plans sold on its platform from Icatu and SulAmérica to its own insurer. That friendly asset-transfer drive totaled R$17 billion. XP was followed by BTG, with R$7.8 billion, and Itaú, with R$7.5 billion.

 

Source: Valor International

https://valorinternational.globo.com/

 

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06/23/2026

 

TRADE WAR PUSHES BRAZILIAN COMPANIES TO SEEK NEW MARKETS

Record exports to 42 countries highlight a growing effort to diversify sales beyond traditional destinations amid global uncertainty

 

The trade war launched by U.S. President Donald Trump has heightened the urgency for Brazilian companies to find new markets for their products. The results are already evident. In 2025, Brazil posted record export volumes to 42 countries, according to data from the Ministry of Development, Industry, Trade and Services.

 

Among the destinations that received record shipments—excluding the United States and China—were Canada, India, Turkey, Paraguay, Uruguay, Bangladesh, the Philippines, Panama, Pakistan, and Norway. The trend could gain further momentum in the coming years as Brazil expands its network of trade agreements to cover its exports.

 

“Many companies already have diversification in their DNA. But revisiting export strategies has become necessary in light of changes in the global environment,” Tatiana Prazeres, the ministry’s foreign trade secretary, told Valor. “The global environment, marked by challenges, shifts in trade policy, and geopolitical tensions, has fostered greater pragmatism among both governments and the private sector,” said Constanza Negri, international trade and integration manager at Brazil’s National Confederation of Industry.

 

Government officials argue that companies’ growing search for alternative markets has helped accelerate trade negotiations, including the Mercosur-European Union agreement. Last week, Brazil’s Congress approved two Mercosur trade agreements that are part of this broader diversification strategy: accords with Singapore and the European Free Trade Association (EFTA), whose members are Switzerland, Norway, Iceland, and Liechtenstein. Taken together, the agreements increase the share of Brazil’s trade covered by trade deals from 12% to 31%.

 

That figure could increase further.

 

Mercosur is negotiating a trade agreement with Canada, which has moved from the 10th-largest destination for Brazilian exports in 2023 to the 8th-largest in 2025. According to the ministry, negotiations are also underway with the United Arab Emirates, Indonesia, Lebanon, and Vietnam.

 

Last week, on the sidelines of the G7 summit, President Lula discussed the potential launch of Mercosur-Japan trade negotiations with Japanese Prime Minister Sanae Takaichi. The start of those talks could be announced at the South American bloc’s summit later this month.

 

Brazil is also seeking to expand its existing agreements with India and Mexico. Negri highlighted the speed with which Congress approved the agreements with the European Union, Singapore, and EFTA, a departure from Brazil’s traditionally slower approach to trade liberalization. In her view, the debate is no longer about whether trade agreements are necessary, but about which agreements make the most sense for Brazil.

 

Prazeres argued that the Singapore and EFTA agreements are more important to Brazilian exporters than many observers realize. Although exports to those markets are heavily concentrated in crude oil and fuels, the range of products shipped there is significantly more diversified than aggregate trade figures suggest. Of the roughly 8,000 categories of goods exported by Brazil in 2025, about 2,500 were sold to Singapore, and 2,280 were exported to EFTA countries.

 

According to Prazeres, those figures indicate substantial room for Brazilian companies—particularly industrial exporters and producers of higher-value-added goods—to expand their presence in those markets. “There are many opportunities for companies in products that may represent only a small share of Brazil’s exports to a given country, but can make a significant difference for an individual business,” she said. Beyond trade diversification, government studies project meaningful economic gains from the Singapore and EFTA agreements.

 

Singapore is viewed as a gateway to Southeast Asia, one of the world’s most open and dynamic regions. The ministry estimates that the agreement could increase Brazil’s gross domestic product by R$28 billion, boost investment by R$11 billion, and expand total trade flows by $40 billion by 2040, driven by higher exports and imports. For the EFTA agreement, projections indicate a R$2.69 billion increase in GDP, an additional R$660 million in investment, and a R$3.34 billion rise in Brazilian exports. Both agreements have received strong support from industry groups for their potential to expand trade and investment opportunities.

 

Negri noted that the EFTA deal is especially significant because it strengthens Brazil’s ties to a market closely integrated with the European Union. She also pointed out progress in areas like investment regulations and government procurement. In contrast, the Singapore agreement is seen as a means to expand Mercosur’s access to Asian markets.

 

Industry groups, however, advocated stringent rules of origin to prevent trade triangulation, in which products from third countries could enter Mercosur via Singapore. “Trade relationships do not develop on a blank sheet of paper,” said Leandro Consentino, a political scientist and professor at business school Insper, emphasizing the political aspect of trade policy. “It is not solely an economic issue. There is also a significant political element, especially this year when both Brazil and the U.S. are approaching elections.”

 

Source: Valor International

https://valorinternational.globo.com/

 

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06/22/2026

SALE OF BAHIA MINING COMPANY NEARS COMPLETION

Acquisition of Bamin by Mota-Engil awaits approval from Brazil’s land transport regulator, sources say

 

The sale of Bamin (Bahia Mineração) to Portuguese infrastructure group Mota-Engil is in its final stages, according to sources familiar with the matter. The transaction is currently under review by Brazil’s Land Transport Agency (ANTT), which must approve the transfer of control of the West-East Integration Railway (Fiol) concession in Bahia state.

 

In addition to the ANTT review, the acquisition is tied to a rebalancing of the concession agreement, negotiations that are also underway within the regulatory agency and could later be referred to the consensus chamber of the Federal Court of Accounts (TCU), according to people familiar with the discussions.

 

For Mota-Engil, a Portuguese company whose major shareholders include China Communications Construction Company (CCCC), the acquisition of Bamin drew interest because it involves not only the railway segment between Ilhéus and Caetité, in Bahia state, but also a port project in Ilhéus and a mining operation in the region, said Manuel Mota, the company’s vice-CEO.

 

“It is a complex project, but one that encompasses three areas of expertise within the group. The port segment, where we have extensive experience in port construction and operations; the railway segment, where we also have operational expertise; and mining, where we likewise have experience in building and operating mines,” said Mota.

 

The executive said Mota-Engil is currently the largest Western contractor in the railway sector worldwide. “We have more than 2,000 kilometers of railways under construction in Africa and completed nearly 2,000 kilometers of railways in Latin America over the past five years.”

 

According to a source, issues under discussion at ANTT include extending the term of the Fiol concession and renegotiating the construction schedule so that completion of the railway would be postponed from 2027 to 2031. The assessment is that such changes would be necessary to make the acquisition viable.

 

There is also an expectation of additional renegotiations, though those would need to be submitted to the TCU consensus chamber because they would involve deeper contractual changes. Within the current administration, there is a view that the Fiol concession model—auctioned in April 2021 during the administration of former President Jair Bolsonaro—contained structural flaws.

 

ANTT did not respond to requests for comment.

 

The concession between Ilhéus and Caetité in Bahia state was awarded to Bamin in 2021, but construction of the segment failed to advance as planned. The company, controlled by Kazakhstan-based Eurasian Resources Group (ERG), blamed the war in Ukraine for the difficulties faced by the group. However, since the auction, the project had already been viewed as financially challenging, and Bamin’s capacity to finance construction had long been questioned within the sector. The company operates a mining project near Caetité and also plans to build a port in Ilhéus.

 

In recent years, the federal government has sought a solution for the project, which is considered strategically important from a logistics standpoint. The segment is the first stretch of the Fiol railway, which also includes two additional sections: an intermediate segment connecting Caetité to Correntina, also in Bahia state, and another expected to extend the network to Mara Rosa, in Goiás state. The latter section is expected to connect with the North-South Railway and with the Fico railway currently under construction by Vale.

 

The federal government had at one point pressured Vale to acquire the asset. The mining company studied the acquisition in partnership with Cedro and BNDESPar, the investment arm of Brazil’s National Development Bank (BNDES), but the plan did not move forward.

 

Bamin did not return requests for comments.

 

Source: Valor International

https://valorinternational.globo.com/

 

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06/25/2026

 

CERRADINHOBIO EXPANDS BET ON CORN ETHANOL

Investments have made the Goiás sugarcane company Brazil’s third-largest producer of the grain-based biofuel

 

 

 

Founded in 2007 as a sugarcane ethanol distillery in Chapadão do Céu, Goiás, CerradinhoBio has transformed itself in recent years, with corn ethanol now its flagship business. With results growing in recent years largely because of that bet, the company continues to invest in the business and is preparing new capacity expansions for the coming years.

 

In the last crop year (2025/26), the company posted a 90% increase in net income, to R$372.7 million. Of the company’s net revenue for the crop year, R$4.3 billion, up 16%, half came from corn ethanol sales alone, which rose 19%. The corn ethanol business, including DDG and corn oil, already accounts for 70% of results.

 

Profit growth last crop year was supported by both the corn ethanol and sugarcane businesses, as CerradinhoBio increased sugar production following capacity investments. In the corn ethanol business, the highlight was gains in operational efficiency, CEO Renato Pretti told Valor.

 

There was also a sharp increase in revenue from VHP sugar, up 176% to R$898 million, resulting from the investment in expanding the plant in the previous crop year. Even so, CerradinhoBio continues to bet on ethanol—and only from corn.

 

In early June, the company began operating an expansion of its corn ethanol plant in Chapadão do Céu. After a R$140 million investment in the expansion project, the unit now has the capacity to process 1.2 million tonnes of corn a year, up from 800,000 tonnes previously.

 

Pretti expects the corn business’s share of results to be even larger this crop year. “In five years, we changed the company’s profile,” he said. With a flex plant in Goiás and a dedicated corn ethanol plant in Maracaju, Mato Grosso do Sul, CerradinhoBio is already the third-largest corn ethanol producer in Brazil, behind Inpasa and FS.

 

For the CEO, the market trend is that any expansion of ethanol supply in Brazil will come only through corn processing. “Corn ethanol is more competitive. The projects are leaner and more agile, and there is a good regional fit with the new agricultural frontiers,” he said. “A sugarcane greenfield project, by contrast, is expensive; I don’t know whether the numbers work. And it is not as agile,” he said.

 

CerradinhoBio already has plans for further expansion in the business. The company has another expansion project for the Chapadão do Céu corn ethanol plant close to being confirmed, and it is also beginning to assess a future expansion of its dedicated plant in Maracaju. In that case, however, capital demand is expected to be higher, requiring more caution in an environment where interest rates remain high, he said.

 

According to the executive, the expansion plans are being carried out with the necessary caution. When CerradinhoBio invested more than R$1 billion in the Maracaju plant, the initiative created an imbalance in its financial metrics. It forced the company, two years ago, to negotiate with banks and holders of Agribusiness Receivables Certificates (CRA) for permission to breach leverage metrics while continuing to meet its payment obligations on time.

 

That squeeze, however, is behind the company. In the 2025/26 crop year, CerradinhoBio posted EBITDA of R$1.5 billion and net debt of R$2.1 billion. In other words, the company ended the season with leverage of 1.4 times, well below the tight levels seen in the middle of the 2024/25 crop year.

 

One strategy to keep investing while preserving the capital structure is to seek cheaper financing sources. For the recently completed expansion in Chapadão do Céu, the company used funds from the Brazilian Development Bank (BNDES) Climate Fund.

 

The company’s expansion into corn ethanol has also meant that CerradinhoBio now needs to turn to alternative biomass sources to generate energy, but the plan is to reverse that. Today, 40% of the energy consumed in production already comes from wood chips. “We have been working on an energy-efficiency project to eliminate the need for alternative biomass,” he said.

 

Source: Valor International

https://valorinternational.globo.com/

 

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06/26/2026

 

CENTRAL BANK DISCUSSED FUTURE PAUSE IN RATE CUTS, GALÍPOLO SAYS

Monetary Policy Committee rejected a pause last week, but considered scenarios in which it could interrupt and later resume the easing cycle

 

 

 

 

 

 

Brazil’s Central Bank Monetary Policy Committee (Copom) discussed last week the possibility of pausing the interest-rate easing cycle at future meetings and then resuming it later.

 

Central Bank Chair Gabriel Galípolo disclosed the discussion on Thursday (25) during a press conference for the release of the Monetary Policy Report, putting on the table for the first time — even if over an uncertain horizon — the prospect of a temporary interruption in the monetary easing cycle that began only three months ago, in March. Galípolo also made a “mea culpa,” acknowledging that the Copom statement contributed to market noise over the future path of the benchmark interest rate.

 

Last week, Galípolo said, Copom ruled out a pause and lowered the Selic by 25 basis points, to 14.25%. After that, the committee moved into a “prospective” discussion about the course of monetary policy. “There are scenarios we began to discuss prospectively, involving pauses at different points and resumptions at different points,” he said.

 

According to the Central Bank chair, that possibility is reflected in the Copom minutes released on Tuesday, when the committee said it had opted for Selic paths that were “less divergent” from those projected by the market.

 

Even so, Galípolo and interim Economic Policy Director Paulo Picchetti avoided giving a firmer signal on the next steps for monetary policy. Picchetti, who is also director of International Affairs and Corporate Risk Management, defended the need to preserve “degrees of freedom” and said the calibration of the Selic will be adjusted as the scenario evolves.

 

Asked about criticism from financial markets, Galípolo said that in periods of greater uncertainty it is normal for investors to seek “guidance” on future policy. But he added that “no central bank is adopting that policy in the world, and the literature does not recommend it.”

 

“There is, in this type of criticism, this confusion between being clearer in the statement and signaling what you are going to do. One thing cannot be confused with the other,” he said.

 

Communication noise

 

Galípolo made a “mea culpa,” however, by acknowledging that the statement helped create noise in financial markets last week. He said the lack of clarity came from an “excess” of information, rather than from a lack of transparency. According to him, the minutes sought to clear up those doubts.

 

One source of noise was the balance of risks for inflation, updated with four factors pointing to upward pressure and three to downward pressure — but without making clear in the statement that the balance was asymmetric to the upside, something that was only spelled out in the minutes.

 

In the balance of risks, the Central Bank provides a more qualitative assessment of factors that could push inflation above or below its projections. Galípolo denied that the asymmetry requires a “mechanical reaction” from monetary policy.

 

“We thought the 4-to-3 [in the balance of risks] was kind of obvious, that it was asymmetric. That does not establish any kind of mechanical reaction from a monetary-policy standpoint,” he said. At another point in the press conference, however, the Central Bank chair said the balance can be classified as asymmetric regardless of the “count” of upside or downside risks.

 

Picchetti said part of the market’s negative reaction to the statement reflected the lack of signaling on the next steps for monetary policy. “The Central Bank sees no present value in giving a signal in a scenario with so much uncertainty,” he said.

 

He acknowledged that the statement’s unusually long text also made it harder to understand. “The paragraph in the Copom statement sought to summarize discussions, and we knew it would generate a strong reaction simply because it was very different from the usual statement,” he said.

 

Demand risks

 

The Central Bank included government measures to stimulate consumption among the risks that could put upward pressure on inflation. Picchetti said the composition of expected GDP growth this year has changed because of the outlook for stronger demand. The monetary authority raised its projection for household consumption in 2026 to 2.1% from 1.4%.

 

“There are effects from income-tax reduction incentives and from the various measures that are already affecting disposable income, making this increase in household consumption possible,” Picchetti said.

 

In the Monetary Policy Report, the Central Bank raised to 79% the probability that the benchmark inflation index, the IPCA, will end 2026 above the target ceiling. For 2027, the probability is 28%.

 

The Central Bank also raised its 12-month inflation forecast through the fourth quarter of 2027 to 3.7% from 3.3%. For 2026, inflation is expected at 5.2%, compared with 3.9% in the previous report, released in March.

 

Source: Valor International

https://valorinternational.globo.com/

 

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06/26/2026

 

OIL PRICES BOOST BRAZIL’S TAX REVENUE

Dividend withholding tax collections remain far below government target

 

Revenue from Brazil’s export tax on crude oil appeared for the first time in the federal government’s May tax collection figures after the levy was introduced in March. The tax generated R$1.05 billion in federal revenue last month, according to data released on Thursday (25) by the Federal Revenue Service.

 

Claudemir Malaquias, head of the Revenue Service’s Center for Tax and Customs Studies, explained that the export tax is collected 60 days after crude oil shipments are loaded. As a result, the first payments began to be recorded only in mid-May. According to BTG economist Fábio Serrano, revenue from the tax is expected to reach about R$3 billion per month going forward.

 

The federal government temporarily reinstated the crude oil export tax at a 12% rate to offset diesel fuel subsidies.

 

According to tax authorities, higher oil prices also supported May’s revenue by boosting royalty collections. Own-source revenue from other federal agencies—a category that includes royalty transfers—totaled R$10.477 billion in the month, up 56.28% in real terms from May 2025.

 

Overall, federal tax revenue reached R$266.79 billion in May 2026, an inflation-adjusted increase of 10.69% compared with the same month a year earlier. In the first five months of the year, collections totaled R$1.32 trillion, up 6.42% in real terms.

 

Revenue administered directly by the Revenue Service rose 9.39% in real terms in May to R$256.31 billion. Adjusted for inflation, May’s total represented the highest amount ever recorded for the month since the series began in 1995.

 

The Federal Revenue Service also reported that withholding income tax on dividend payments has generated only R$1.5 billion in revenue so far this year.

 

For 2026, however, the government expects to raise about R$30 billion through its minimum tax on high-income individuals. Of that amount, R$23.76 billion is expected to come from the taxation of dividend distributions and R$6.18 billion from income earned abroad.

 

The measure was designed to offset the revenue loss resulting from expanding the personal income tax exemption threshold to monthly incomes of up to R$5,000 and granting a partial tax credit for taxpayers earning up to R$7,350 per month. According to government estimates, the personal income tax relief will reduce revenue by R$28 billion.

 

However, revenue from dividend taxation is not collected evenly throughout the year. Unlike the personal income tax relief, whose effects appear monthly through payroll withholding, receipts from dividend taxation depend on companies’ profit distribution schedules, which can cause fluctuations in revenue over the course of the year.

 

The final settlement of the minimum tax will take place only in the following year’s annual tax return. During the year, the minimum tax applies only to dividend distributions.

 

Meanwhile, according to the Federal Revenue Service, revenue from the Tax on Financial Transactions (IOF) was once again among the strongest contributors to federal tax collections.

 

IOF revenue rose 31.11% in May from the same month of 2025, totaling R$8.157 billion. The increase reflects the higher tax rates introduced by the Lula administration last year to boost revenue and support fiscal results in both 2025 and 2026.

 

In the year through May, IOF revenue has increased 38.77% from the same period last year, reaching R$41.82 billion.

 

Source: Valor international

https://valorinternational.globo.com/

 

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06/29/2026

 

SPACEX IPO FUELS BDR TRADING BOOM IN BRAZIL

B3 stock exchange plans same-day depositary receipts for future U.S. tech listings, including OpenAI and Anthropic

 

Elon Musk’s SpaceX initial public offering became a worldwide sensation. The record IPO, which raised $86 billion, drew the attention of millions of investors, including in Brazil. On the first day of trading, when the stock jumped 19%, local investors were able to buy a fraction of the Nasdaq-listed shares through the Brazilian stock exchange.

 

B3 offered direct access through securities linked to shares traded abroad, known as BDRs, or Brazilian Depositary Receipts. To make the product more accessible to retail investors, the exchange structured SpaceX’s BDR so that five receipts corresponded to one share — meaning each BDR represented one-fifth of a share in Musk’s rocket company, whose stock would cost nearly R$700 after currency conversion. It was the first time B3 launched a BDR on the same day a company debuted on a foreign exchange.

 

The results were immediate. Trading volume reached R$145 million on the first day, climbed to R$216 million the next, and hit R$397 million on the third day. To put that in perspective, the BDR ranked 34th among the most traded assets on B3, including all products and stocks.

 

The same model is expected to be used for other mega-deals still in the pipeline in the U.S., especially those likely to become market hype, even though current volatility in the technology sector could push some offerings into next year. The IPOs of OpenAI and Anthropic, for example, are also expected to have BDRs trading on B3 on their debut day, said Luiz Masagão, B3’s vice president for products and clients.

 

“This is an evolution of the business, offering simpler access to individuals who want to invest abroad,” Masagão said. He noted that investing through BDRs can also be cheaper from a tax standpoint, since buying the security locally avoids the Financial Transactions Tax (IOF) charged on international transfers.

 

Retail access

 

Created in 2006 to allow local investors to buy shares of global companies through Brazil’s own exchange, BDRs only gained real traction in 2020, when a regulatory change opened the product to retail investors. Until then, only qualified investors were allowed to buy them. Today, 818 BDRs are listed on B3, up from 608 in 2020.

 

The stock of BDRs rose to R$50 billion last year from R$16 billion in 2020. According to the latest available data, 954,000 investors hold BDRs in their portfolios. That figure was twice as high in 2022, but has declined since then as risk aversion increased amid Brazil’s high-interest-rate environment.

 

Beyond global companies, BDRs have also given investors access to Brazilian companies that chose to go public abroad, such as investment platform XP, or migrated their listings overseas, as lender Banco Inter and, more recently, meatpacking giant JBS did. In those cases, investors who wanted to remain shareholders had to accept BDRs.

 

XP, Inter, and JBS were among the five most traded BDRs on B3 last year. Nvidia, whose market capitalization has soared amid the race for chips, ranked first. Tesla, Musk’s electric-vehicle maker, came second.

 

Another segment of the market is made up of BDRs linked to global exchange-traded funds (ETFs). There are now 300 listed in Brazil, held by 57,100 investors.

 

New markets

 

According to Masagão, B3 will continue launching BDRs, not only for U.S. and European assets but also with an eye on other regions. He said the exchange is in talks with the Securities and Exchange Commission of Brazil (CVM) to gain flexibility for the launch of certain BDRs. The discussions involve technical issues, he said, aimed at adjusting market features so the assets can be listed locally.

 

In the beginning, foreign companies had to be interested in having their BDRs listed in Brazil, which limited the number of available assets. Since 2010, however, unsponsored BDRs have existed and have become the most common format, as they can be issued by a depositary institution without the foreign company’s involvement.

 

To provide liquidity, the securities rely on market makers — financial institutions hired to ensure buy and sell offers and accurate prices on trading screens.

 

Investor demand

 

At research firm Eleven Financial, specific reports on BDRs began being produced for clients a year ago, reflecting stronger demand. Fernando Siqueira, head of research at Eleven, said demand has grown in recent years in line with major market events.

 

During the strong rally in U.S. stock markets, the BDR tied to the S&P 500 ETF attracted investors in Brazil. Now, he said, the SpaceX IPO has similar potential. “Information is easier to obtain today, and that has helped,” Siqueira said.

 

Ágora has also seen rising demand from investors, a trend that has accelerated with the performance of overseas assets in recent years and growing interest in artificial intelligence companies, said Ricardo França, head of research for individual investors at the brokerage. “BDRs are an interesting way to achieve regional diversification more practically, without investors having to move money out of Brazil,” França said.

 

Source: Valor International

https://valorinternational.globo.com/

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06/29/2026

 

FARMERS DELAY FERTILIZER PURCHASES AS DEBT RELIEF TALKS DRAG ON

Slower buying raises concerns over input supply, credit access and the size of Brazil’s next grain harvest

 

The wait for potential government measures to support indebted farmers has led many producers to postpone purchases of some inputs for the 2026/27 crop, weighing on business for resellers and manufacturers. The uncertainty has deepened delays in fertilizer buying, which is running 10 percentage points below the average pace seen in recent years.

 

Rising defaults in rural areas, persistently high interest rates and delayed input purchases are raising doubts about the outcome of the next crop season, which could also feel the effects of El Niño. The issue has already triggered concern within the federal government.

 

Jeferson Souza, a market analyst at Agrinvest, said soybean farmers had bought 68% of the fertilizer volume expected for the next crop as of the first half of June. That percentage already factors in an estimated reduction of about 10 percentage points in demand for these inputs in 2026/27. The five-year average for this point in the season is 75%. For corn, which is planted after soybeans, the delay in fertilizer purchases is even larger, at 13 percentage points.

 

According to Veeries’ fertilizer sales index—which covers soybeans, summer corn, second-crop corn, cotton, sugarcane, wheat and coffee—farmers had purchased only 50% of the total fertilizer volume expected for 2026/27 by the first half of June. The average for the past three years, as well as the pace at the same point in 2025, is 60%.

 

Prices and debt

 

The main reason for the delays is the increase in fertilizer prices, said Bruno Fardim Christo, Veeries’ grains and fertilizers specialist. Sales of seeds and crop protection products are in line with the average, he said.

 

Experts say expectations over debt renegotiation in Congress have become a new factor behind the delays in input purchases, particularly fertilizers. They note, however, that the industry was already under pressure from the effects of the wars in Iran and Ukraine, which have made these inputs more expensive, as well as from high interest rates and lower farmer profitability.

 

“There is indeed a correlation. Debt and farmers’ financial situation have, in a way, an influence [on the delays]. The cause is multifaceted,” said Bernardo Silva, executive director of the National Union of the Fertilizer Raw Materials Industry (Sinprifert).

 

Other industry executives say that, as buying decisions are pushed back, some fertilizer shipments may not arrive at farms in time for the next summer crop planting. Similar complications have already hit the agricultural machinery industry, where sales fell 18% from January to April. Manufacturers expect to end the year with revenue 8% lower than in 2025.

 

Crop risk

 

With fertilizer use expected to decline, credit access becoming more difficult and concerns growing over weather conditions because of El Niño, the market has started to price in a possible reduction in the next grain harvest. “There are several reasons to say we may have smaller crops ahead,” one industry executive said.

 

That outlook is also under review at the Ministry of Agriculture. The ministry created a committee, which met for the first time last week, to discuss scenarios for the impact of climate problems on production. There are no forecasts yet, but the greatest concern is the lack of resources to subsidize rural insurance, as well as the absence of a guarantee fund that would allow farmers to obtain new financing.

 

In private conversations with financial-sector executives, farmers have already reported plans to reduce planted area and prioritize work in consolidated, lower-risk fields where margins may be positive. “Farmers in difficulty will have less capacity to operate because of a lack of credit and other factors. A smaller crop is likely,” a bank director said.

 

Reseller pressure

 

CropLife Brasil, which represents seed, crop protection, bioinput and biotechnology companies, said the market is facing a cyclical problem that is disrupting business with farmers. There is no “contraction” in the market, according to executive manager Renato Gomides, but delays in product sales are evident.

 

Last week, Eduardo Monteiro, the executive who heads Brazilian operations at fertilizer U.S. multinational Mosaic, said expectations surrounding the debt renegotiation bill have stalled talks and are affecting resellers in particular. The situation has deteriorated since April, he told journalists at an event in São Paulo.

 

Andav, the National Association of Agricultural and Veterinary Input Distributors, did not respond to requests for comment.

 

Source: Valor International

https://valorinternational.globo.com/

 

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06/29/2026

 

BRAZIL PREPARES DIGITAL RECEIVABLES SYSTEM FOR MAJOR COMPANIES

New tool could reshape payments between large companies and suppliers, expanding access to receivables financing

 

A group of large companies from different sectors, including Petrobras and Stellantis, is expected to soon begin using so-called book-entry trade receivables, the digital version of Brazil’s traditional “duplicatas” used to formalize credit sales and services. The start of the supervised production phase—the final step before the instrument is fully implemented—is expected in the first days of July, on a date still subject to confirmation by Brazil’s Central Bank.

 

The monetary authority will hold an event on the topic on Tuesday (30), when it is expected to announce the start date for supervised production, a phase that will still be optional for companies. Authorizations have already been granted to registrars Cerc, B3, and Núclea, which will begin operating the receivables system, initially with a limited number of transactions. Other companies, such as SPC Grafeno and Quick Soft, are in testing cycles to also join the supervised production phase.

 

Digital trade receivables are estimated to move more than R$11 trillion a year, involving around 1.5 million issuing companies and more than 18,000 large debtor companies, according to a survey released this month by Núclea.

 

The new instrument is designed to make transactions safer and give suppliers more autonomy to advance receivables, encouraging a broader supply of credit. In practice, the change could alter the payment dynamics between large companies and their suppliers. At first, only some transactions will be carried out within the new system. Initial participants will include debtor companies and at least one supplier.

 

System integration

 

Fernando Fontes, CEO of Cerc, a Brazilian receivables registrar, said the start of supervised production also marks progress in interoperability between systems—the ability of different platforms to communicate and exchange data in a standardized way, a central feature of digital trade receivables.

 

“This will be a gradual movement, and I hope this transition period is put to good use,” Fontes said. He said it would be a problem if all companies left integration until the last minute. Once the Central Bank sets a date for mandatory adoption, corporate engagement is expected to increase, he added.

 

Although supervised production is not mandatory, some companies believe the period will help them learn and make operational adjustments. The adoption of the new receivables format in Brazil will be phased in. During the first six months of this stage, companies will need to enter the system in pairs: the drawer, or supplier, and the drawee, or debtor company. After that period, when dynamic payment slips become operational, this pairing will no longer be required. Twelve months after supervised production begins, large companies will have to use the tool.

 

Six months later, medium-sized companies will be required to join, followed by small companies another six months after that. The expectation, however, is that once large companies adopt the system, all businesses connected to their supply chains will be pulled in.

 

Banks and companies

 

Roberta Fortunato, superintendent for trade receivables at B3, said banks are among the first players to show interest in the supervised production phase. A financial institution is expected to bring in a debtor client, which in turn involves a supplier. According to Fortunato, the first wave should come from large banks, followed by midsize lenders. “What we have observed throughout 2026 is that large companies are moving to be effectively prepared for next year,” she said.

 

Fortunato said the trend is for a cascading effect along the supply chain, as suppliers tend to be incorporated once a large company starts using the system.

 

At Núclea, Rafael Dal Mas, superintendent for new business, said some clients, including banks and companies, are already on standby awaiting the new phase. “We expect few to start, not least because this is a pilot phase,” Dal Mas said. “The idea is to test the environment and real situations.”

 

Roberta Ferraz, partner and new-business director at Monkey, a receivables-advance platform, said eight companies are interested in using digital trade receivables from the very start of the supervised production phase. “The advantage of joining before it becomes mandatory is that all parties can face the least possible impact,” Ferraz said.

 

Petrobras model

 

Petrobras hired a consortium that includes Cerc and Liber in 2024 to use the model, considering both the complexity of the process and the possibility of financing clients without affecting cash flow.

 

The company said it sought to move early because of its significant revenue volume and the complexity of its billing structure. “[The new solution] should increase security, transparency, and control over receivables transactions, strengthening the credit market,” Petrobras said.

 

Today, larger companies usually organize payments according to their own schedules and negotiate deadlines based on their bargaining power. With the new instrument, that dynamic could change, since a supplier will be able to issue an invoice and, at the same time, create a registered receivable and negotiate it in the market.

 

Even companies that only pay bank payment slips—and in theory would not face major changes—will see their daily routines affected, since they will need to adapt purchasing processes and validation procedures for receivables registered in their names.

 

Payment rules

 

Under the rules, companies will have 10 days to respond, either accepting or rejecting the receivable. Once accepted, the supplier will be able to sell it to advance payment. Later on, this will mean that the company making the payment will deposit the money with a third party, rather than with the supplier already registered in its system.

 

The adoption of digital trade receivables comes eight years after the instrument was created by law. The regulatory process and publication of the rules went through several stages, with rules issued in May 2020 and supplemented in August 2023. The long gap between the creation of the instrument and its debut is explained by several factors, including the pandemic, but also by greater caution to avoid repeating problems faced when credit-card receivables were adopted.

 

Source: Valor International

https://valorinternational.globo.com/

 

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