RIO DE JANEIRO, BRAZIL – According to a report published by The New York Times, the destination of millions of vaccine doses, which have not yet been authorized by the US regulatory agency, is being discussed by White House and Health Department officials.
US government officials are considering sending millions of covid-19 vaccine doses produced by AstraZeneca in partnership with Oxford University to other countries, including Brazil.
Sources told the newspaper that about 30 million doses of AstraZeneca’s vaccine are in a warehouse in the state of Ohio. (Photo internet reproduction)
According to a report published by The New York Times, the destination of millions of doses of the immunizer, which has not yet been passed by the US regulatory agency, is being discussed by White House and Health Department officials. Some believe that the vaccines should be released to countries that desperately need to bolster their immunization campaigns.
“We are aware that other governments have approached the US government regarding the donation of AstraZeneca doses and are urging the US government to carefully consider these requests,” Gonzalo Viña, a spokesperson for the lab, told the New York Times.
Sources told the newspaper that about 30 million doses of AstraZeneca’s vaccine are in a warehouse in the state of Ohio. However, because the lab has not completed a phase 3 trial in the United States, its emergency use application to the FDA, the country’s regulatory agency, has not yet been made.
The New York Times says that the US government has rejected all requests made so far, but AstraZeneca’s spokesperson said that talks on the donation option are ongoing.
One of the obstacles to donations is US President Biden’s plan to step up the vaccination campaign in the country. In a speech yesterday, he instructed the states to release vaccines to all adults as of May 1st.
When announcing last Wednesday the purchase of another 100 million doses of the Johnson & Johnson vaccine, US president Joe Biden was asked about the prospect of helping other countries and he answered that he would make donations as soon as the USA has the required immunizers to protect the country’s population.
Source: Valor
RIO DE JANEIRO, BRAZIL – (CNN Brasil) Economist Cláudio Frischtak is considered one of the biggest names in Brazil when it comes to infrastructure. Founder of the international business consulting firm Inter.B and one of the people in charge of the World Bank’s industry and energy area for seven years, he does not see room for the State to promote growth in Brazil, something that is occurring in the United States and Europe.
Cláudio Frischtak. (Photo internet reproduction)
According to him, the current government has also failed to create a relationship of trust with investors and the current interventionism of President Jair Bolsonaro might further delay a recovery.
Moreover, the economist doesn’t perceive fiscal room for the State to assume a role that private initiative, out of concern with the pandemic and the future of the economy, still doesn’t want. The state as a growth engine was something that ex-president Luiz Inácio Lula da Silva advocated in a speech this week.
Frischtak sees the economy growing at 3% in 2021 as a result of the statistical inheritance, which is a kind of boost left over from the last quarter from year to year. Since activity in the fourth quarter was stronger than in the preceding ones, even if the GDP quarterly result is stagnant, we will still have a positive GDP. However, in order to grow above this in the coming years, reforms and privatizations will be necessary.
The complete interview is below:
Brazil is currently posting an investment rate of around 16% of GDP. Economists believe this should increase to at least 22%. How can this be increased?
It is not something voluntary. It is not enough for the government to decide that the rate is going to be 22% or 23%. The basic conditions for this to occur need to be created. It is no use just saying that we will invest more and increase government spending. The experience of the PAC (Growth Acceleration Program), for instance, was very negative.
But is there room for increasing public investment, as ex-president Lula recently said?
Ex-president Lula is wrong in this respect. It is not that we can’t increase public investment. It is possible, but the fiscal room is tight. In theory, you can increase in some areas to reduce bottlenecks or invest with very high social returns. But when he did this in his first term, in 2003, he had a very strong fiscal adjustment plan. Ex-minister Antonio Palocci and the ex-president of the Central Bank played a brilliant role with their teams to adjust the accounts to the new conditions. Therefore, reforms are needed.
There was not a word about fiscal adjustment in his speech.
He can talk about public investment, but if he is elected the game will need to be different. What room does he have? The State has clear limitations. If you do not comply with these limitations and believe that an act of magic and voluntarism is enough, you will have an even greater increase in the dollar immediately thereafter. Long-term interest rates will also spike. And this will affect investment. It will be completely counterproductive. We have already learned this in practice.
How do you perceive the economy in 2021? Will we see a rebound?
I believe that it will be a very difficult year for our economy. There will be growth because of a statistical inheritance, which is significant. This inheritance will allow Brazil to grow by 3%. But in the absence of this inheritance, we are going to see near stagnation in 2021. And it is unclear what is going to happen in 2022. President Bolsonaro is now saying that the vaccine is the weapon, but he should have figured this out at least 6 months ago.
There are concerns from several economists about the return of populism. What is your opinion?
There is a real risk of populism. All players are watching very carefully and interventions in Banco do Brasil, Petrobras and all the fluctuations that are an outcome of this.
We are witnessing a rise in commodities and a rebound in global economies with state investment, as is the case of the United States. Can we expect better years ahead?
It is true that this year will be a year of global recovery. The American economy should grow 7% and China will also experience strong growth. So will the European Union. But next year we will likely see a cooling off after this strong upswing. Still, the trend is upwards. Commodity prices should reflect this recovery cycle. For Brazil it is good, both in the agricultural and mining sectors. Our economy will benefit from this.
Can we consider a new “commodities boom”, even if at a smaller scale than in the early 2000s? How can we capitalize on this?
We need to return to normality and the government needs to have composure. Yes, we have to approve a fiscal program with consistency and with foundations. The government’s position is modest in relation to this issue. We need to pass an administrative reform that applies to current and new public employees. Tax reform is also needed. We must put an end to the tremendous distortions we have in Brazil. We need an agenda to normalize relations with the rest of the world. Otherwise, we are going to miss this boom. We need a normal government.
Source: CNN Brasil
RIO DE JANEIRO, BRAZIL – At 33 years of age, Haitian Manite “Carol” Dorlean had always hated the cold. But, eight months pregnant with twins, she saw in the few meters river breadth the shortest distance she had ever been from realizing a dream.
Haitians leave Brazil amid economic crisis and fake news about open border in US. (Photo internet reproduction)
“She crossed because she always thought that America is the land from which milk and honey flow. Everyone wants to get there,” said Gordia “Hector” Pierre, Carol’s ex-husband, who lives in the Dominican Republic, in an allusion to the biblical expression about the promised land for the Jews.
After spending two years in Brazil fruitlessly pursuing a better life, Carol stepped into the Rio Grande riverbed believing that in the US she would find what she was looking for. But she never reached the American bank alive. Her body was retrieved by the US border patrol on January 8th. She became the 18th person to drown and die from hypothermia there since October 2020, according to US authorities.
Carol’s trajectory from the time she left Brazil to her arrival in the US is illustrative of a move that more and more Haitians have been trying to make. Eleven years after the earthquake that devastated Haiti and prompted their arrival in Brazil (according to the Federal Police, an estimated 130,000 Haitians entered the country between 2010 and 2018), the group is now taking the opposite route.
Driven by discontent with the Brazilian economic crisis and fueled by a rumor that, under Biden’s administration, the US borders would be open to them – particularly to pregnant women or women with babies – Haitians are embarking on a long and dangerous journey to leave Brazil.
According to the US Customs and Border Protection data, the number of arrests of Haitians who crossed the border with Mexico without a visa in January 2021 – amid the covid-19 pandemic – more than tripled compared to the same month in 2020.
While in the first 31 days of last year 470 Haitians were spotted trying to enter the US through Mexico without a visa, there were 1,700 in the same period this year. And although the country in which they lived before their arrival in American soil is unknown, both Haitians and migration experts guarantee that part of this contingent left Brazil.
“Since the transition from the Trump to the Biden administration, immigrants have been expecting a reform of the immigration law in the United States. This has driven the caravans of immigrants and it is possible that these migrants who live in Brazil are somehow also driven by these expectations of leaving Brazilian territory and hopefully access Central America to then reach the United States,” explains sociologist Letícia Mamed, a professor at the Federal University of Acre who specializes in migration.
Last Monday, March 8th, a group of 100 migrants, most of them Haitian, decided to leave the bridge where they had been camped for almost a month, at the border between Peru and Brazil, in Assis Brasil, Acre. Among the group, there were 15 to 20 children and 5 pregnant women, one of them in her 8th month of pregnancy. In the municipality of only 7,500 inhabitants, at least 300 more recently arrived Haitians were trying to find refuge in precarious and improvised shelters.
All of them intended to leave Brazil and go through Peru. To social agents, they admitted that Peruvian territory is not their final destination: most would try to reach the US. In the case of Haitians and other migrants who leave Brazil by land route, the journey begins in Acre and goes through Peru, Ecuador, Colombia, Panama, Nicaragua, Costa Rica, Honduras and Guatemala, before reaching Mexico.
But a little over a month ago, the Peruvian government closed its land border because of the Covid-19 pandemic and interrupted the flow, which led to tension and an impasse in the area. In attempts to force their way through, Haitians and some Africans were repressed with stun bombs and batons. In one of these situations, recorded by the press in the area, a woman lifted up her shirt to show her pregnant belly and shouted “I’m pregnant,” while facing the Peruvian security agents.
With no forecast by the Peruvian government for the reopening of the bridge, the Brazilian government has even asked the courts for the area’s forced repossession. Federal public defender João Chaves, a specialist in immigration, has spent the last few weeks in the area trying to prevent further violence. In photos taken by the defender, the precariousness of Haitians’ shelters on the bridge can be clearly seen: some sheltered under tents built from tree branches and tarps or garbage bags. According to Chaves, the bridge was occupied out of desperation.
“It is a borderline situation of despondency, of hopelessness. The Haitian, African, Cuban and many other countries’ communities depend on mobility, they no longer have any expectation of a comfortable life in Brazil, of a safe life, because of the recession, the economic crisis, the pandemic, they desperately seek other countries and can’t get there,” says Chaves.
Life deteriorating in Brazil
When the first Haitians came to Brazil, the country’s GDP was growing at 7.5% and the dollar exchange rate stood at R$1.66. In contrast, in 2020, the Brazilian economy registered a 4.1% drop and it takes R$5.20 to buy a dollar. The data are not abstract in the lives of those who need not only to support themselves but also to make large remittances abroad to help support friends and relatives who have been left behind in their homeland. In 2020, remittances from Haitian emigrants abroad accounted for 37% of Haiti’s GDP, according to World Bank data.
The statistics illustrate why Carol decided to come to Brazil – and also what led her to leave it in 2020. She had previously lived in the Dominican Republic and Chile, both of which she left in search of higher incomes to support her three children and widowed mother.
Carol came to Brazil in 2017 and according to her ex-husband had several jobs. One of her longest jobs in the country, in 2019, was as cleaning attendant in a restaurant in Curitiba. There, she worked about 10 hours a day in exchange for R$1,000 a month. But just with the rent of a room and urban transportation, she spent R$800. The income was too low to accomplish her original plans.
“Once, she was able to advance her thirteenth month’s salary, because she was really in need, and she got US$100. Sending US$100 to her children was a victory for her,” says Shirley Batista, a sous chef in the same restaurant where Carol worked. Batista says that the Haitian woman suffered from basic needs such as lacking a blanket to sleep in the cold Curitiba winter nights.
“She worked as a cleaner, cleaning the bar, cleaning the lounge. When she was done, she would go to the kitchen and wash all the dishes. She was highly exploited. It was something that I got very upset about in that place. One day she made a comment that really hurt me. She looked at me and said: ‘I am black, right, so I am a slave’,” says Batista, who preferred not to disclose the name of the restaurant, from which she says she quit, among other reasons, because she disagreed with Carol’s employment situation.
The uneasiness with both the financial issue and the racial prejudice is frequent in the migrants’ reports.
At the age of 35, a Haitian known in the community as Chamara, who refused to give his name, says he is determined to leave for the US. He wants to reach Florida this year, where his mother and his 9-year-old son now live. For almost 8 years in Brazil, he has been working as an electrician in Rio Claro, in the interior of São Paulo, and says that although he works maximum overtime every month, his salary rarely exceeds R$2,000.
“As I am a father and I play my father’s role, and my mother knows what the situation is like here, she accepts that I send her US$100, US$200. She accepts it because she knows that in Brazil there is no money. But if I depended on what I am earning to take care of my son, there I would never be able to take care of him,” he laments.
With degrees in law and journalism, he resents the fact that he has never been able to get better paying jobs in his field of training. He has been trying to get Brazilian citizenship to make it easier to leave Brazil: that way he would take a direct flight to Mexico and try to cross the border. Chamara refused to discuss the option of going through Acre. According to him, all the other Haitians in Brazil came to the same conclusion about not having a future in the country.
“Economically, the Haitians won’t fit into Brazil’s system, with this salary, with all the prejudice they have, Brazil is not ready to welcome foreigners, I won’t even say Haitians, but foreigners. Brazil is not even ready for Brazilians,” says Chamara.
Despite the harsh criticism of the country, Chamara is still in a better condition than a significant part of his compatriots. During the pandemic, many lost their income. Sectors such as building construction or services, which usually employ Haitian labor, were severely affected.
According to Akon Patrick Dieudonné, leader of the Social Union of Haitian Immigrants, since some are employed informally, without a signed contract, they are cheaper workers to lay off for employers. And for this reason, once they lose their jobs, they have no access to insurance or severance pay.
Amid the pandemic, a detail has further complicated the situation of foreigners in Brazil: there is a waiting line of over 20,000 applications for renewal and regulation of the National Migratory Registration Card, a kind of identity document for foreigners, whose issuance is the responsibility of the Federal Police.
There is no foreseeable solution to the problem. Without this document, they are illegal in the country and can’t apply for benefits such as the family grant or the now extinct emergency aid.
“This moment we are experiencing is a bottomless pit. Destitution is now very visible. You go to Missão Paz, for example, and you see Haitians selling corn, tomatoes, sacks of rice (to survive),” says Patrick, in reference to the immigrant shelter run by the Catholic Church in downtown São Paulo.
The American dream
The time of deep disenchantment with Brazil coincides with the end of Donald Trump’s administration and the coming to power of Democrat Joe Biden. Biden was elected vowing to end what he called Trump’s “cruel and inhumane” immigration policy and to re-accept refugees and migrants to American territory. He also pledged to build along with the US Congress a path to citizenship for 11 million undocumented immigrants living in the country today.
All this reached Haitian community’s attention as a guaranteed asylum if they reach American territory, a historical dream of the country’s migrants. The US today is home to the largest Haitian community outside of Haiti, with an estimated 700,000 people, according to 2018 data from the Migration Policy Institute.
Pierre, Carol’s ex-husband, says that this kind of discourse encouraged not only his ex-partner, but many in the community. “Now there is Biden in the US, they say Biden is soft. But Biden hasn’t talked to them, I don’t know what language Biden and the Haitians spoke, but they say that Biden is the father of migrants, that he will let them cross, and they kill themselves, they leave good jobs to head to the US,” says Pierre, unable to conceal his outrage with the spread of fake news in the migratory network.
Not only Haitians are ready to try to re-enter the US. In January 2021, the US recorded the detention of over 78,000 people trying to illegally cross the Mexican border, the highest figure for the period in over a decade.
According to a report in the New York Times, in the last two weeks, the number of unaccompanied minors in the border region has tripled, exceeding more than 3,000.
According to Laura Lopes, coordinator of migrant services at the Adus Institute, which works in São Paulo on the social integration of refugees and victims of forced migration, the cause for migration of Haitians – and other nationalities – is now heavily based on fake information and unfounded hopes.
“There are several and varied rumors they allege to make the crossing. They said that now with the new president it is easier to get in. The border is not closed. Something else they told me, and I think that explains why so many women are going, is that they said that if you are pregnant, once you reach the Mexican border, you will be allowed in because you are pregnant. I even have an acquaintance who is Haitian and she became pregnant, took the route and when she got there, she reported being pregnant and the child was eventually born in the United States,” says Lopes.
The Public Defender’s Office has been issuing reports in an attempt to refute these fake news and stem the flow, or at least offer more reliable data for an informed decision about leaving Brazil. In a recent interview, the US State Department spokesperson Kristina Rosales said that “the United States is working on a policy to restore the migration process, which will be organized and fair, that it won’t be a process where everybody gets to the border and whoever wins the race, will get in.”
At the US border, unable to cope with the migration wave, the Biden administration has been criticized for resorting to an arrangement created by his predecessor, Trump, during the pandemic, to summarily expel migrants.
The US border protection service confirmed that Haitians continue to be deported back to Haiti despite the political and social chaos in the country. Since early this year, the nation has been the stage of violent protests calling for the removal from power of the current president, Jovenel Moïse. Protesters claim that his mandate is already over. The president, on the other hand, claims to be the victim of a coup d’état and declares that he will remain in power until 2022.
In hindsight, Pierre wishes that Carol had simply abandoned the idea of going to the US and returned to the Dominican Republic to help him raise the couple’s children.
According to him, when he learned of her death “it was as if they had turned out the light of the world.” Two months after their loss, the family is still struggling with the process of releasing her body for burial. He says he shares her story as a means of raising awareness among his compatriots about the risks of the endeavor. “Manite told me how people were dropping dead from starvation, from exhaustion. She left people unconscious along the way, but she had to keep going because if she stayed, she would die too. Out of 100 people who leave Brazil, half or 40% die. And when they pass, they are deported. There are many who go, but few who make it,” he summarizes.
Source: BBC Brasil
RIO DE JANEIRO, BRAZIL – Portugal will maintain travel restrictions to and from Brazil until at least Easter, Prime Minister António Costa said on Thursday, March 11th.
The Portuguese government suspended direct flights to Brazil in late January because of new variants of the coronavirus.
Portugal maintains travel restrictions to Brazil; Foreign Ministry confirms 3rd return flight. (Photo internet reproduction)
This week, the Portuguese government extended restrictions also to flights with stopovers in Brazil, a “loophole” that was used before to bypass the blockade.
All travelers passing through Brazil, the UK or South Africa will need to provide a negative Covid-19 test, which must have been performed 72 hours before travel. A 14-day quarantine is also mandatory upon landing.
The Portuguese Prime Minister also announced the closure of the land border with Spain to contain the spread of Covid-19.
Return to Brazil
With the lack of direct flights, hundreds of Brazilians have been struggling to return to their country.
The Brazilian Ministry of Foreign Affairs has confirmed a 3rd extraordinary commercial flight between Lisbon and Guarulhos. Two other such flights – which are paid for by travelers but negotiated by the government – have already been performed between February and March.
“Interested parties should deal directly with TAP about booking or the potential reuse of airline tickets,” said the Brazilian Foreign Ministry in a statement.
Source: G1
RIO DE JANEIRO, BRAZIL – Ecuador has reached a preliminary agreement with a unit of Thailand’s state-run PTT PCL to extend to 2024 the payment period of an oil-for-loan agreement that was originally planned to be fully paid through 2022, the country’s energy minister said on Thursday, March 11th.
Ecuador reaches pre-agreement with Thailand’s PTT to renegotiate oil-for-loan deal. (Photo internet reproduction)
State-run oil company Petroecuador was expected to deliver up to 85 million barrels this year to PTT and PetroChina to amortize loans extended by the companies to the nation over the last decade.
But making those deliveries would have made it difficult for Ecuador to fulfill other long-term commitments, minister Rene Ortiz told Reuters in an interview.
The renegotiation with PTT, which is not expected to imply an adjustment of the loan’s interest rate, would leave room for Petroecuador to refine a portion of the nation’s oil output, export up to 10% through the spot market, and honor supply contracts with customers including Royal Dutch Shell and Phillips 66.
If the proposed deal is signed this year, PTT and PetroChina would jointly receive up to 77 million barrels of Ecuadorian crude per year through 2024, Ortiz said.
“(This) would ease our commitments and improve Petroecuador’s capacity to sell directly to other buyers and fulfill spot sales,” Ortiz added.
Ecuador still has to deliver over 230 million barrels of oil to PTT and PetroChina to fully repay the loans. A similar refinancing agreement with PetroChina is not currently on the negotiating table, Ortiz said.
The minister also said that Ecuador is not yet negotiating a reparation pact with trading firm Vitol after a unit of the company agreed to pay a total of US$164 million to resolve an investigation by the U.S. Justice Department over bribery in the region. In Mexico, Vitol has offered over US$30 million in compensation to state oil firm Pemex.
“At some point we’ll have to reach a level of understanding between the parties,” he said, adding that Vitol has remained out of Ecuador’s oil tendering activity in the meantime.
FRESH INVESTMENT
Ecuador seeks to award energy projects in the coming months to secure upstream investment now that it is fetching US$61-US$65 per barrel for sales of its Napo and Oriente crudes.
The Andean nation’s output declined almost 10% to some 479,250 barrels per day (bpd) last year, mainly due to pipeline interruptions, according to figures provided by the energy ministry to Reuters.
The government has began receiving offers for the flagship Sacha oilfield – where production is expected to grow from its current level of 68,000 bpd of crude to 85,000 bpd once in private hands – as well as the TermoGas project to reuse Petroecuador’s increasingly idled infrastructure for supplying natural gas to factories.
The final contracts are set to be signed by the next government after the second round of the presidential election in April, to be contested by leftist economist Andres Arauz and conservative banker Guillermo Lasso.
Besides a separate marine terminal, a solar power project and a wind farm, Ecuador also expects to transfer its 110,000-bpd Esmeraldas refinery to private operation.
A consortium including U.S. firm KBR and South Korea’s Hyundai Engineering Co. is expected to submit an offer “in the coming days” for refurbishing, modernizing and operating the facility in a US$3 billion project, Ortiz said.
“Ecuador is a dollarized economy, resting on three pillars: direct foreign investment, exports and foreign debt,” Ortiz said. “The next administration, from any political side, will be interested in continuing with these processes.”
RIO DE JANEIRO, BRAZIL – Argentina is expected to harvest 44 million tonnes of soy and 45 million tonnes of corn this season, below the previously forecast 46 million tonnes for each crop, due to dry conditions, the Buenos Aires Grains Exchange said on Thursday, March 11th.
Argentine soy, corn crop estimates cut due to dry conditions, exchange says. (Photo internet reproduction)
The country’s Pampas farm belt has suffered unusually dry weather since the middle of 2020. A recent heatwave combined with low rainfall has exacerbated the situation.
“Early-planted soy fields are approaching harvest with expected yields below historical averages. Late-planted soy is seeing losses of harvestable area due to pest attacks and depleted water reserves,” the exchange said in its weekly crop report.
“At the same time, the worsening condition of corn crops has generated a decrease in yield expectations,” the exchange said.
The central Pampas will continue to have high temperatures and only spotty rainfall over the days ahead, the exchange said in a separate weather report earlier in the day.
Although early-year showers brought partial relief to some of the driest areas, uneven rainfall in February and March forced the Rosario exchange to sharply cut its 2020/2021 soybean harvest estimate to 45 million tonnes on Wednesday.
“The climatic situation is very dramatic and very negative for late-planted soybeans. Many soybean crops have already been lost because the rains did not come,” said Pablo Adreani, a Buenos Aires-based agricultural consultant.
“With regard to late-planted corn, the situation is a little better because corn has later flowering and vegetative periods, so it has more time to receive water than soy,” Adreani said.
Argentina is the world’s largest exporter of processed soybean oil and meal, and the third-largest corn exporter. Harvesting of 2020/2021 soybeans and corn, the two main crops in the country, is set to begin in the coming weeks.
“Tropical winds will return, causing very high maximum temperatures in the center of the agricultural area,” the exchange said in its earlier weather report.
“Towards the end of the forecast (by next Thursday), the passage of a storm front will begin, producing general rainfall of varying intensity over the western part of the agricultural area, but without reaching its easterly zone”, it said, referring to the area most affected by the drought.
RIO DE JANEIRO, BRAZIL – Yield risks arise whenever Brazil’s heavily exported second corn crop is planted late, but this year the delays are the worst in a decade, and the pressure for favorable weather through the next several months is substantially higher than usual.
Historically dry conditions in Brazil last year led to a slow soybean planting pace. Late soybean sowing alone does not always mean the corn crop will be planted just as late, but rains have hampered the bean harvest, worsening the delays for the second corn sowing that immediately follows.
Brazil’s alarmingly slow planting pace raises flags for second corn. (Photo internet reproduction)
However, Brazil’s official statistics body, Conab, remains upbeat on the harvest prospects. The agency on Thursday increased the country’s total corn crop to 108.1 million tons from the previous forecast of 105.5 million.
That included a jump of 2.7 million tons for the second corn crop, which is still being planted, to 82.8 million tons on both area and yield increases. Conab also lifted Brazil’s soy harvest by 1% to a record 135.1 million tons.
But the world’s No. 2 corn exporter still has many hurdles to clear to reach a bumper corn harvest. Consultancy AgRural estimated second corn planting as of a week ago at 54% versus 80% a year ago.
SUPPLY SHORTAGES
Brazil’s government is already concerned about tight domestic supplies over the next year. On Wednesday, the Agriculture Ministry noted that measures will be introduced, possibly in May, to boost next year’s summer crop.
That first corn crop is the one that supplies local needs, and it used to represent the bulk of Brazil’s output. But now it accounts for less than a quarter as global corn demand has grown, and Brazil’s export capabilities have increased. Currency weakness has encouraged even more planting of the country’s second crop since it is attractive for Brazilian farmers to sell on the global export market.
The expected harvest delays push the availability of the second crop even later, causing more concern for domestic supplies by mid-year.
Conab on Thursday pegged Brazil’s 2020-21 first corn crop at 23.5 million tons, down slightly from the prior outlook. That is also notably down from the initial October outlook of 26.8 million tons and last year’s 25.7 million. Yields have fallen 14% since the October estimate.
Conab’s 82.8 million-ton second crop forecast is up 8% since the initial outlook, primarily on an expected increase of plantings. That compares with last year’s harvest of 75.1 million tonnes.
Source: Reuters
RIO DE JANEIRO, BRAZIL – Brazilian retail sales fell in January for a third consecutive month, official figures showed on Friday, March 5th, largely in line with expectations and led by declining supermarket, food and drink sales, as well as weakness in the clothing and footwear sector.
Brazil retail sales fall in January for third month in a row. (Photo internet reproduction)
Researchers at government statistics agency IBGE said the fall was in large part due to the expiration on December 31st of emergency government cash transfers to millions of poor families to help them through the Covid-19 pandemic.
The 0.2% monthly fall was slightly less than the 0.3% decline forecast in a Reuters poll of economists, and the 0.3% fall compared with the same month a year earlier was slightly more than the 0.25% fall forecast in the poll.
January’s figures followed a 6.2% slump in retail sales in December, the second biggest fall on record.
Four of the eight segments covered by IBGE showed falling sales in January. Supermarket, food and drink sales fell 1.6% on the month, while clothing and footwear sales were down 8.2%.
On a wider basis, including cars and building materials, retail sales in January fell 2.1% on the month, and were down 2.9% from January 2020, IBGE said.
Since rebounding to record levels in October last year, the volume of retail sales in Latin America’s largest economy has fallen 6.5%, IBGE said.
RIO DE JANEIRO, BRAZIL – Travel across Brazil and you’ll spot signs almost everywhere for BR Distribuidora, the owner of South America’s largest gas station chain. The familiar green-and-yellow logo of the company, formerly a unit of state oil giant Petrobras, is a fixture in big cities and hamlets alike.
In Brazil, organized crime siphons billions from gas stations. (Photo internet reproduction)
Less well-known is BR’s effort to purge its retail network of alleged crooks. In 2019, the company booted hundreds of independent franchisees from its network for purported “irregularities,” a BR spokesman told Reuters, including evading fuel taxes and ripping off customers with adulterated gasoline. In all, BR stripped its name from 730 outlets, roughly 10% of its Brazilian network at the time, the company said.
But other suspected criminals continue to operate BR stations, Reuters has found. A major franchisee in the state of Rio de Janeiro, for example, has been indicted by state prosecutors at least 12 times for fuel-related crimes over the past 15 years and is currently on trial for his alleged participation in a sprawling fuel-smuggling ring, according to court documents reviewed by Reuters. He has not been convicted in any of the court cases examined by the news agency.
BR’s situation is not unique. Crooks have infiltrated the four largest gasoline chains in Brazil, where they are estimated to control hundreds, if not thousands, of stations, according to Reuters interviews with more than two dozen industry and law enforcement officials. The news organization also reviewed thousands of pages of court cases and enforcement records from Brazil’s oil regulator.
Cheats sell stolen gasoline and rig pumps to short customers the full amount they paid for, the interviews and documents show. More serious crimes abound, too. Some entrepreneurs use their stations to launder cash for gangs like the First Capital Command, South America’s largest organized crime group, authorities allege, as well as for “militias” – violent criminal enterprises composed in part by retired and off-duty cops.
In southern Brazil, a station owner is facing trial for the 2017 murder of the head of an industry watchdog that was investigating suspected fraud at the businessman’s operations.
Gas station graft is lucrative. Ill-gotten gains at Brazil’s pumps amount to R$23 billion (US$4.15 billion) annually, according to a November estimate from the Instituto Combustivel Legal, or ICL, an industry group founded last year to combat fraud.
Brazil’s President Jair Bolsonaro has blamed unscrupulous gas station owners for cheating the treasury and fleecing motorists amid public anger over recent fuel prices hikes.
“It’s a business worth billions,” Bolsonaro said during a live broadcast on multiple social media platforms in February.
In statements to Reuters, Brazil’s largest fuel distributors by market share – BR, Ipiranga, Raizen and Ale – acknowledged grappling with bad actors in their retail outlets, all of which are owned by independent franchisees. Together these four firms account for nearly half the gas stations in Brazil. The distributors said they work diligently to cull miscreants, feeding information about alleged misconduct to police, prosecutors and regulators.
These companies have ties to some of the biggest names in the oil industry. Raizen Combustiveis SA, for example, is a joint venture between Royal Dutch Shell PLC and local ethanol producer Cosan SA; it oversees roughly 5,000 Shell-branded gas stations in Brazil, according to the most recent data from Brazil’s oil regulator. Ale Combustí veis, with around 1,500 stations, is a unit of Switzerland’s Glencore PLC. Top player BR, the former subsidiary of Petroleo Brasileiro SA, boasts approximately 7,800 locations. Ipiranga is a subsidiary of São Paulo-based Ultrapar Participações SA and has 7,105 stations in Brazil.
Lawsuits aimed at stripping alleged wrongdoers of their franchises can take years to wend their way through Brazil’s court system, industry officials said. Periodic purges, like BR’s 2019 housecleaning, can amount to whack-a-mole, with bad actors finding ways to gain control of other stations, said Carlo Faccio, the head of ICL.
“The situation of the fuel industry is very bad,” he said. “We’re very far behind. There’s a lot we have to do.”
No government agency tracks how many gas stations are linked to convicted or suspected criminals in Brazil. Reuters analyzed court records in the state of Rio de Janeiro, which authorities say is a hotbed of this illicit activity.
The news organization identified 20 station owners who have been indicted or convicted for fuel-related offenses since 2015. Collectively, the 101 gas stations they own amount to roughly 4% of all retail fuel outlets in Rio state. Most of those owners were linked to organized criminal groups, according to prosecutors and court documents they submitted in various criminal cases.
Guilherme Vinhas, a partner at the Rio de Janeiro law firm Vinhas e Redenschi Advogados who has worked for all of the largest distributors, said criminal infiltration of the retail fuel sector had become a major concern for his clients. “The companies are monitoring this,” Vinhas said, “and they’re worried.”
IRRESISTIBLE OPPORTUNITY
Fuel-related crimes are common in oil-producing nations in emerging markets.
In Mexico, for example, thieves tapping into pipelines cost state oil company Pemex 15 million pesos ($728,000) per day, Chief Executive Octavio Romero Oropeza said last year. This purloined fuel frequently is fenced by complicit gas station owners, Mexican authorities say.
Still, industry executives say Brazil’s fuel crooks are among the world’s worst, due in part to a tax regimen they say invites cheating. Fuel taxes here vary widely from state to state. For example, the state tax on ethanol, sold in virtually all Brazilian gas stations, is 32% in Rio de Janeiro state, compared to 13% in neighboring São Paulo. That creates an incentive for criminals to purchase fuel from low-tax jurisdictions and resell it in high-tax states to crooked station owners who charge customers the higher tax and pocket the difference, industry officials said.
“It’s the most complex (tax system) that I know,” Marcelo Araújo, the chief executive of Ipiranga, said during a virtual oil industry conference in December.
Criminals in Brazil reap R$7.2 billion (US$1.3 billion) annually from fuel tax evasion alone, according to a 2019 study by the Fundação Getúlio Vargas, a Rio de Janeiro think tank. Adulterating gasoline with ethanol or other liquids is another trick to boost profits, authorities said.
But some of the biggest rewards for station owners, authorities and company sources said, comes from using their outlets to launder money for criminal organizations.
Among the Rio gas station owners with criminal records identified by Reuters is Cleber “Clebinho” Oliveira da Silva. He currently owns two gas stations in Rio, according to corporate registration records: one an independent station unaffiliated with any national brand, the other a franchised location for Ipiranga.
In 2018, da Silva was convicted in state court of belonging to the Justice League, one of Rio’s largest criminal militias. Da Silva, now 37, was sentenced to six years in prison. He has remained free as he appeals that decision.
In 2019, da Silva was sentenced to pay a fine and carry out community service in a separate case for using his independent station to launder the Justice League’s illicit profits. The nature of the community service and amount of the fine was not specified in the sentencing document. Authorities say the Justice League is involved in a variety of illegal activities, including fuel smuggling, auto theft and protection rackets.
Prosecutors did not establish how much money da Silva laundered. But in his decision, the judge cited witness testimony alleging that the station’s monthly revenue more than quadrupled to 900,000 reais ($163,000) after da Silva purchased a piece of the business in 2015.
Within a year of that conviction, da Silva purchased another station, this one a franchised location for Ipiranga, corporate registration and regulatory records show.
Ipiranga told Reuters that da Silva was not an owner of that station when it entered the company’s distribution network in 2008, and that it was unaware of his involvement. “If this person currently has a stake … he did it completely behind the back of Ipiranga and in a way that goes against what is written on the franchise contract,” the company said in an e-mailed statement.
Da Silva could not be reached for comment. His attorney did not respond to requests for comment and declined to provide contact information for his client.
Another alleged crook is José Rodrigo Gallo de Faria, a former Shell franchisee in Rio de Janeiro. In 2019, state prosecutors indicted de Faria for receiving stolen gasoline, according to a copy of the indictment seen by Reuters. He is free pending trial.
Police described de Faria in that indictment as the “main sponsor” of the so-called called Xerem Militia, which specializes in robbing fuel from pipelines. According to the indictment, the militia in April 2019 illegally tapped into a pipeline in a working class neighborhood near the city of Rio de Janeiro, setting off an explosion that killed an eight-year-old girl. De Faria was not implicated in the girl’s death.
A lawyer for de Faria, Ralph Hage, said his client was innocent and could document that his fuel was purchased legally. Hage did not provide proof of those legal purchases to Reuters, but said he would produce the relevant documentation in court.
Raizen, which oversees the Shell brand in Brazil, declined to comment about de Faria. His outlet no longer bears the Shell logo. In January, a few weeks after Reuters first contacted Raizen about de Faria, his station exited the Shell network and turned independent, according to registration records filed with Brazil’s national oil regulator.
One of the best-known figures among Rio de Janeiro’s gas station owners is Mario “Marinho” Augusto de Castro, who owns a stake in at least 43 outlets in the state, according to corporate registration records reviewed by Reuters.
De Castro has been the target of at least 15 law enforcement investigations over the past two decades, all involving fuel, according to state police records reviewed by Reuters.
At present he is defending himself in at least five criminal cases. In one of those cases, filed in 2008, prosecutors charged de Castro with participating in a large criminal organization that smuggled low-tax fuel into Rio state.
At least 18 of de Castro’s stations are franchised locations for BR, and at least seven stations are franchised locations for Shell, the records show.
Renato Alves, a lawyer for de Castro, said his client has never been convicted of a crime and denies wrongdoing in all ongoing court cases. He said de Castro’s multiple franchise agreements with BR and Raizen show he is well-respected in the industry. Alves added that the sheer number of government regulations de Castro must contend with across his large portfolio of stations has made his client vulnerable to “undeserved” indictments.
BR said it had “no knowledge of a criminal conviction related to the activities of Mr. Mario Augusto de Castro,” adding that the company “will reinforce the mechanisms that it uses to curb” suspected wrongdoing by its franchisees.
Raizen declined to comment about de Castro.
FIGHTING BACK
Fuel distributors frequently press lawsuits against franchisees they suspect of irregularities in an effort to terminate their franchise agreements, according to several company sources and court cases reviewed by Reuters.
But those cases can take years to work their way through Brazil’s crowded courts, the interviews and legal records show. Even victories don’t bring swift relief. “Non-compliant (franchisees) typically take advantage of all sorts of legal maneuvers to delay compliance with judicial decisions,” a spokeswoman for BR wrote in an e-mail.
Brazilian law dictates that retail gas stations cannot be owned by oil producers or distributors. Rather, they must be owned by independent third parties – usually individuals – who are free to buy and sell stations among themselves. While franchise agreements typically give distributors the right to approve these transactions, such sales nonetheless create a backdoor through which unscrupulous actors can buy into well-known chains by dealing directly with station owners, said Délio Campos, a spokesman for Glencore’s Ale network.
“In some cases, despite contractual conditions forbidding it, property can change hands without the company’s consent having been obtained,” Campos said.
Da Silva, the convicted money launderer, purchased his Ipiranga station in 2019 from two individuals with a pre-existing franchise agreement with the company, regulatory records show. Ipiranga said any ownership stake by da Silva happened without its knowledge. Da Silva could not be reached for comment. His lawyer did not respond to a request for comment.
Authorities say fuel crime has become so lucrative to Brazil’s underworld that those trying to stop it are at risk.
On March 23, 2017, Fabrizzio Machado da Silva, the head of the Brazilian Association for Fighting Fuel Fraud, an industry watchdog in southern Brazil, was shot to death outside his home in the city of Curitiba. Police allege the hit was arranged by Onildo Chaves de Córdova II, an area businessman upset at the association’s investigations into potential fuel adulteration and pump rigging at three of his independent gas stations, according to the criminal indictment and Luis Roberto de Oliveira Zagonel, a lawyer for da Silva’s family.
State prosecutors charged Chaves with murder. He is free pending trial. No trial date has been set. A lawyer for Chaves, André Pontarolli, said his client is innocent. He added that police probes into Chaves’ business practices have not resulted in any indictments.
The Fighting Fuel Fraud group, meanwhile, disbanded shortly after da Silva’s murder, Zagonel said.
RIO DE JANEIRO, BRAZIL – Uruguayan female diplomatic officials charge that they have been victims of “different situations of harassment, verbal abuse and discrimination for a long time,” the Ministry of Foreign Affairs reported on Wednesday, March 10th, in a press release.
Uruguayan female diplomatic officials denounce harassment, verbal abuse and discrimination. (Photo internet reproduction)
The complaints were summarized in a letter sent by the Association of Foreign Service Officers of Uruguay (AFUSEU) on Monday to the Undersecretary of Foreign Affairs, Carolina Ache, who forwarded it to Foreign Minister Francisco Bustillo on Wednesday.
“This Ministry of Foreign Affairs administration has been working on the gender issue on an ongoing basis and the allegations cause deep concern,” the Foreign Ministry said in the statement.
“As a result of this situation, Foreign Minister Bustillo this morning made contact with prosecutor Jorge Díaz, the director of the National Women’s Institute (InMujeres), Mónica Bottero, and with María Noel Vaeza, regional director of UN Women for the Americas and the Caribbean, in order to report the denounced situation,” the statement added.
So far, the Prosecutor’s Office, InMujeres and Vaeza have not publicly commented on the case.
The Foreign Ministry did not confirm how many female officials have lodged complaints. However, El Observador newspaper, which reported having had access to AFUSEU’s letter and was the first to report on the complaints, announced on Wednesday that there were over 65.
According to the Foreign Ministry, Bustillo and Ache, who chairs the institution’s Gender Commission, will proceed to “assess short-term measures for the definitive eradication of this type of conduct.”
The type of measures to be taken has not been specified.
Source: CNN Esp
