Fight against deforestation in Brazil decreases under the government of Jair Bolsonaro

Ibama inspectors, the body responsible for environmental protection in Brazil, applied fewer warnings and fines for flora infringement until the end of August 2019 in the Legal Amazon. In Brazil, fires caused by human action or deforestation are crimes against flora, as well as the sale of illegal timber.

According to a report made by the gazetaweb site and the G1 site, servers that fight environmental crimes in Brazil say that the embargoes are not respected and that Ibama is weakened in the current administration.

The problem of environmental destruction in Brazil is not restricted to the Amazon region. Last week, the Cerrado and the Pantanal were also the targets of the same problem.

Last Thursday, the government of Mato Grosso do Sul decreed a state of emergency after more than 1 million hectares were consumed by fire.

According to Exame magazine, data from the National Institute for Space Research (Inpe) burnings show that the Pantanal closed August with 4,660 fire outbreaks, 235% more than in the same period last year and 50% more. than the historical average between 1998 and 2018.

According to the Brazilian Central Bank, Brazil's GDP in July 2019 fell 0.16% over the previous month

The Brazilian Central Bank Economic Activity Index (IBC-Br), considered a kind of informal "preview" of Brazil's GDP, fell by 0.16% in July 2019, compared to June of the same year. This is the worst result for the month in the last three years.

In the first seven months of 2019, Brazil's GDP registered growth in just two months, May (1.16%) and June (0.34%). All other months of 2019 showed negative numbers.

According to the Focus Bulletin, a survey conducted by the Brazilian Central Bank, the financial market forecast for 2019 GDP is 0.87%.

Brazilian services and commerce sectors surprise with unexpected growth but do not recover losses in the year, according to IBGE

According to the Monthly Survey of Services, released by IBGE today (12.09.2019), there was a 0.8% growth in the service sector between June and July 2019, in Brazil. Analysts and economists expected growth of around 0.4%. This is the best result since December 2018. However, despite this slight recovery, Brazil's services sector is still 11.8% below the record reached in May 2014 and 1.2% lower than December last year.

Another sector that posted positive numbers this week was the Commerce sector in Brazil. According to the Monthly Trade Survey, released by IBGE, retail sales in Brazil increased 1% in July, compared to June, and had the third positive month in a row. It is the best result for July since 2013 when the advance was 2.7%.

This scenario reinforces the projections that bet on more cuts in the basic interest rate in Brazil, Selic, by the Brazilian Central Bank's Monetary Policy Committee (Copom) in the coming months.

The first days of September 2019 in Brazil are marked by 7,304 fire outbreaks in the Cerrado and 6,200 in the Amazon rainforest

According to data from the Bank of the Burn Program, of the National Institute for Space Research (Inpe), indicate that the Cerrado surpassed the Amazon in the number of fire outbreaks in Brazil.

The main causes, according to experts, are fires caused by human action and those that spread due to the heatwave that affects the Cerrado region in recent days.

The Cerrado, the second largest biome in South America, is rich in biodiversity. Nearly 12,000 species of plants have been identified, along with thousands of different types of fish, amphibians, reptiles, birds, butterflies, and other animals. Despite its undeniable importance, according to the Ministry of Environment, only about 8% of the Cerrado is legally protected by protected areas.

Increasing sales of electric cars in Europe lead Volkswagen to shift its combustion engine production to Brazil and Argentina

Motivated by the wave of electrification of European cars, Volkswagen decided to transfer part of its production of combustion engines from Germany to factories in San Carlos, in the state of Sao Paulo, Brazil, and Cordoba, Argentina, where the electric car segment still crawling, according to Pablo Di Si, president of the automaker for South America.

This shows that while the global automotive industry is going towards its "electrification", Brazil's automotive market still has few electric car models. There are currently 4 electric models and some hybrids. This means that the Brazilian market will lag behind the industry's technological innovations for some time.

Thus, we will continue driving excessively expensive cars that pollute the environment for years to come.

IBGE indicates that Brazil should have a record harvest of 239.8 million tons in 2019

According to the IBGE Systematic Survey on Agricultural Production, the August estimate for the 2019 crop points to a new record in grain production in Brazil. If the forecast of 239.8 million tons of grain is confirmed, it will exceed by 1.4 million tons the record obtained for the 2017 harvest. In 2018, production was 226.5 million tons.

The expectation of a larger harvest of second-crop corn increased the forecast for the national grain crop in 2019.

Brazil is expected to produce 7.2 million tonnes of winter cereals this year, with 80.8% of this total wheat (5.8 million tonnes). Oats account for 13.7% (985.6 thousand tons), and barley 5.5% (391.6 thousand tons).

According to Inpe, Brazil today has over 100,000 outbreaks of fire

Brazil has exceeded 100,000 outbreaks of fire, according to Inpe. In the municipality of Chapada dos Guimarães, army firefighters, brigade members, and military combat three major fires. One of them, inside the National Park.

A survey by the Acre Environment Secretariat in partnership with the Federal University of Acre (Ufac) Gamma Laboratory reports that the state in northern Brazil, in the Amazon region, had more than 27,000 hectares of degraded areas this year with burned.

Between January and August 2019 alone, more than 46,000 outbreaks of fires were recorded in the Amazon, an increase of over 100% over the same period in 2018.

The wave of out-of-control fires is not restricted to Brazil. In Paraguay, the fires produced destruction and a smokescreen that covered the Brazilian city of Ponta Pora. Today there are at least 2,580 fire outbreaks in various regions of Paraguay, 150 km from the Brazilian border.

Retailers lose value at Bovespa (B3) after Amazon Prime launches in Brazil; Shares of B2W (BTOW3), Lojas Americanas (LAME4), and Magazine Luiza (MGLU3) fall

There is a scenario of short-term pressure on the Brazilian Stock Exchange related to Brazilian retail companies. With the start of Amazon Prime direct sales in the country, stocks of Brazilian retailers were the worst performers of the benchmark index of the Brazilian stock market, the Ibovespa.

B2W, Lojas Americanas, and Magazine Luiza were among the biggest losses yesterday. Today this scenario can be repeated. Therefore, the launch of Amazon Prime will bring volatility to the stocks of e-commerce companies in Brazil in the short term.

Amazon Prime came to the Brazilian retail market offering free shipping, movies, and music for $ 89 a year or $ 9.90 a month. Which will give you access to Prime Video, Prime Music and Twitch Prime.

What most stood out in the media was the announcement of free delivery of Amazon Prime to the capitals of the Southeast and South of Brazil, as well as Brasilia and Goiania. Amazon will also offer express shipping at no additional charge from 2 business days, with no minimum purchase value, for products sold under the Prime seal.

Paulo Guedes, Brazil economy minister, says he plans to create new CPMF, a tax capable to collect up to 150 billion

In an interview with Valor Econômico newspaper, Brazilian Economy Minister Paulo Guedes announced that the country will have a new tax along the lines of the former CMPF (Provisional Contribution on Financial Movement).

The announcement is a kind of electoral fraud because Jair Bolsonaro, during the presidential campaign, promised not to recreate the tax, including calling it "disgrace" and "damn".

In the interview, Guedes said he would propose rates of 0.2% to 1% on each transaction, but it would be up to Congress to set the size of the tax. 

Another criticism about the new tax is its fate. According to Guedes, the new CPMF will have a rate of 0.2% to 1% and may raise R$ 150 billion. The old CPMF was created to increase the health budget but was not used for this purpose. Now the new tax does not even have this varnish.

The evident contradiction of government that claims to be neoliberal, but creates taxes to increase revenue. The tax, if created, will have a ripple effect and will produce distortions in the productive structure.

Several liberal-biased movements that were supporting the government are already criticizing the move. Liberal think tank Ilisp has already stated in his Twitter account that he will campaign against the new tax.

Bradesco (BBDC4) estimates that the basic interest rate of the Brazilian economy, the Selic, could close 2019 at 4.75%

Banco Bradesco revised its forecast for Brazil's basic interest rate, Selic. Now the bank's expectation is that Selic will close 2019 at 4.75% and remain at this level until the end of 2020. The previous forecast was that interest would be at 5%.

For Bradesco, the Monetary Policy Committee (Copom) of the Brazilian Central Bank should promote two further cuts of 0.50 percentage points in the September and October meetings. Afterward, Bradesco believes that the Copom will reduce 0.25 percentage points in the December meeting. That would lead to 4.75% the rate that currently stands at 6%.

This bet by Bradesco increases the pressure on the Copom and the Brazilian Central Bank, as it adds to the criticism that many economists are making against the current government's economic policy.

For economist Laura Carvalho, for example, the Copom "amid high unemployment, economic stagnation, rising wage inequalities, and below-target inflation expectations, waited" until the end of July 2019 to reduce unemployment. Selic rate by 0.5 percentage point to 6% per annum.

So far, the fall of Selic and the approval of the Social Security Reform have not been enough to leverage the Brazilian GDP. Jair Bolsonaro's government has so far presented no plans to reactivate the Brazilian economy. This, coupled with the absurd statements of both the president and ministers of his government, make the future scenario of the Brazilian economy even more uncertain.

According to Maersk, Brazil's foreign trade growth expectations slow to 2020

According to the PortoseNavios website, Maersk report indicates that hopes for resumption of Brazilian foreign trade in 2020 have fallen. 

According to PortoseNavios, "For the largest shipper in the world, there is a possibility of recovery only for 2021 due to the slower global scenario, due to the trade war between the largest powers in the world - China and the United States -, and Brexit, with the departure of the Great Britain of the European Union. In the regional context, the Argentine crisis compresses Brazilian exports, while in the local context the reason is the poor logistics infrastructure of the country".

In an interview with the newspaper Folha de S. Paulo, Maersk's Head of Product Management of the East Coast in South America, Matias Concha, stated that "unfortunately Brazil is failing to materialize external opportunities. This is the case of the real, whose devaluation is favorable for exports."

For him, the Brazilian government needs to invest in "in transportation, logistics, and infrastructure. If they do not occur, they will prevent Brazil from taking advantage of its potential."

Asked by NSC Total, if any embargoes by Brazilian positions, especially in the environmental area, could impact the market, Concha stated that "any barrier, any difficulty for trade is a concern. Whether an embargo, tax or tariff. We experienced this last year, we had a blockade of Brazilian protein exports to Russia, and that had an impact. What happens is that after 15 months of importing Brazilian meat, they were able to find different providers and today they can live without the need for Brazilian meat."