China says willing to increase agricultural, industrial goods imports from Brazil

© Reuters. Chinese President Xi Jinping and Brazilian President Jair Bolsonaro attend a welcoming ceremony in Beijing © Reuters. Chinese President Xi Jinping and Brazilian President Jair Bolsonaro attend a welcoming ceremony in Beijing

BEIJING (Reuters) – China is willing to increase its imports of agricultural and industrial goods from Brazil in order to enhance bilateral trade, Chinese Vice Premier Hu Chunhua said on Friday.

Hu, at a seminar in Beijing, also said the two countries can deepen cooperation in areas such as infrastructure, according to a pool report.

China is Brazil’s biggest trading partner and largest source of foreign investment. Last year, bilateral trade rose to a record $ 100 billion.

Brazilian President Jair Bolsonaro, who was also at the seminar, is in China to mark the 45th anniversary of the establishment of diplomatic ties between the countries.

Brazil and China are part of BRICS, a grouping of major emerging economies that also includes Russia, India and South Africa. China has said BRICS countries must strengthen their unity, increase cooperation and uphold multilateralism.

“The world is facing serious challenges from unilateralism and protectionism, putting pressure on major economies as uncertainty and instability are on the rise,” Hu said.

“China and Brazil, as two major economies, should increase communication and cooperation to face these challenges and realize shared development.”

Brazil is hopeful China will authorize more local meat exporters before Chinese President Xi Jinping visits Brazil next month, as the South American country seeks to position itself as a major food exporter to the world’s most populous nation.

Discussions between a Brazilian delegation to China and local authorities this week also covered demand for Brazilian commodities like sugar, cotton and ethanol.

The two nations are still discussing “a protocol” for exporting Brazilian soy and cotton meal.

Brazil is China’s main soybean supplier but has struggled to increase trade in soymeal with the Asian country.

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U.S.-China trade war boosts Brazil local soy prices, spurs deals

© Reuters. FILE PHOTO: Trains carrying soybeans are seen near the port of Paranagua in the southeastern Brazilian city of Curitiba © Reuters. FILE PHOTO: Trains carrying soybeans are seen near the port of Paranagua in the southeastern Brazilian city of Curitiba

By Roberto Samora and Ana Mano

SAO PAULO (Reuters) – The price of Brazilian soybeans in local currency reached the highest level in almost two months, driven by a spike in port premiums for soybeans and a weaker currency, both caused by the trade dispute between China and the United States.

Prices in Sorriso, at the heart of Brazil’s soy country in the state of Mato Grosso, closed at 62.31 reais ($ 15.67) per bag on Tuesday, 0.81% above the previous day and the highest level since June 18, according to price research center Cepea/Esalq.

Brazil’s port premiums at Paranaguá rose to $ 1.35 over Chicago futures on Tuesday after the United States escalated the war against China, the world’s largest soy importer, which responded by halting all deals for U.S. farm products.

Brazil port premiums have soared 70% from June 16, Refinitiv data shows, reaching the highest level since November 2018.

Camilo Motter, a grain broker in Paraná state, said that the combination of a weak Brazilian real and high port premiums were boosting values for soybeans in the domestic market, when considering reais per 60-kg bags.

The Brazilian currency fell almost 5% against the dollar this month to almost four to the greenback on Wednesday ().

Lucílio Alves, a grains analyst with Cepea/Esalq, said Chinese demand is likely to rise. “After the escalation of the trade war, they will probably focus on Brazil and even cancel U.S. soybean purchases,” he said.

Brazilian farmers are taking the opportunity to sell old crop soy and also to clinch some deals to sell next year’s crop that they will start to plant next month, according to producers association Aprosoja.

“The producer waits for moments like this,” said Bartolomeu Braz Pereira, head of Aprosoja, adding that some farmers have also boosted barter deals with suppliers of fertilizers and agrochemicals, already looking to guarantee inputs for the next crop, and taking advantage of better relative prices for the beans.

“Yesterday and today, grain traders called bidding for future soy, but forward sales remain slow,” said Antônio Galvan, a Mato Grosso farmer, adding he has no old crop left to sell.

Brazil is expected to increase soybean planted area by 2.3% in the new season, tilling a total of 36.7 million hectares, according to a Reuters poll.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Forex News

Brazil and Argentina renew rivalry on Pan Am handball court

By Steve Keating

LIMA (Reuters) – Whether soccer or basketball, a World Cup or an Olympics, the Brazil-Argentina rivalry is one of the greatest in sport and it played out again on Tuesday on the Pan Am Games women’s handball court.

The two countries can work themselves into a lather with nothing more than pride on the line but the stakes were much higher at a seething Videna Sports Center, with a gold medal and direct qualification for the 2020 Tokyo Olympics going to the winner.

This round went to Brazil, who broke open what had been a tight contest with a second half surge, cruising to a 30-21 win to punch their Tokyo ticket.

It was the 11th gold of the Games for Brazil, keeping them in front of their bitter rivals who sit eighth in the standings.

The United States continued their gold medal rampage, improving their haul to 28 after just four days with Mexico a distant second on 13 followed by Brazil.

The U.S. grabbed gold on land, sea and air on Tuesday, led by Karissa Cook and Jace Pardon who capped an unbeaten run to the women’s beach volleyball gold with a 14-21 22-20 15-10 win over defending champions Argentina.

Gymnast Riley McCusker was flying high at the Polideportivo Villa El Salvador, taking top spot on the uneven bars finals while weightlifter Sarah Robles picked up gold with victory in the women’s over-87kg division.

Timothy Sherry in the 50 meter rifle and Brian Burrows in the trap were on target in the men’s shooting competition while waterskier Regina Jaquess added her third gold to the U.S. cause by winning the overall women’s title.

After a slow start, Canada finally found its gold medal mojo, doubling their total from four to eight to leap up the leaderboard.

Gymnast Ellie Black, Canada’s most decorated athlete at the 2015 Pan Am Games, is well on her way to repeating that performance. She picked up a second gold and third medal in three days by winning the vault event.

The 23-year-old also took bronze in the uneven bars to take her tally to four medals for these Games and nine over the last two Pan Ams.

Black led Canada to a team silver on Saturday then on Monday successfully defended her all-around crown.

“We wanted to deliver some strong performances and we were able to do that,” said Black. “It is awesome to bring some more medals home for Canada.”

It was a big day in the canoes for Canada with Alanna Bray-Lougheed and Andreanne Langlois triumphing in the women’s K2 500m and Dominik Crete getting home first in the men’s K1 200m sprint.

Dorien Llewellyn triumphed in the men’s overall water skiing competition.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Sports and General News

Trump threats drive historic Brazil, Mexico currency divergence

Trump threats drive historic Brazil, Mexico currency divergence Trump threats drive historic Brazil, Mexico currency divergence

By Jamie McGeever

BRASILIA (Reuters) – The fate of Latin America’s two main currencies have contrasted so much lately that traders and analysts are questioning whether Brazil’s real can keep rallying while the Mexican peso slides.

The two emerging market currencies usually move in tandem with each other, but foreign trade spats, domestic politics and economic data have driven them apart lately.

Many in the market are betting they will snap back in line, but some suggest an underlying shift in investor views.

U.S. President Donald Trump’s threat on May 30 to slap tariffs on Mexico may have tipped the balance for money managers to reduce the Mexican exposure in their Latin America funds, according to Standard Chartered (LON:) senior strategist Ilya Gofshteyn.

“While we expect some short-term recovery in Mexican risk assets, we believe that this episode has injected a more permanent risk premium into holding Mexican assets,” he told clients in a note.

“We believe investors may rotate out of the Mexican peso and into the Brazilian real as a result.”

The peso has been hit hard by a credit-rating downgrade in addition to U.S. trade tensions, while the real has rebounded from an eight-month low on hopes that Brazil’s government can pass an ambitious pension reform bill through Congress.

The peso fell as much as 5% in the last few weeks – it has since regained most of that ground since Trump said last Friday a deal had been struck with Mexico, although he has since revived the threat if Mexico cannot meet his demands – while Brazil’s real strengthened some 6% in the last three weeks.

The following charts show the extent to which traders have been laying opposite bets on the two currencies.

The first two show the simple 30-day correlation between the dollar/peso and dollar/real exchange rates, one overlayed with Brazil’s exchange rate and the other with Mexico’s. The correlation, almost always positive, has turned negative.

(GRAPHIC: Brazil-Mexico FX correlation – https://tmsnrt.rs/2XMIC4n)

(GRAPHIC: Brazil-Mexico FX Correlation – https://tmsnrt.rs/2IfYbfV)

Since their respective crises and devaluations in the mid- to late 1990s, the peso and real have almost always been positively correlated, rising or falling together.

The average correlation was +0.5 over the last five years, +0.52 over the last decade and +0.48 over the last 20 years.

A correlation of 1.0 is the strongest possible positive correlation, and -1.0 the strongest negative correlation. There have only been seven negative correlations in the past 20 years before the current one. All have lasted just days or weeks.

Four have marked the start of, or a reversal of, major trends for the real, sometimes lasting years. For example, after December 1999 the real embarked on a super-charged rally that took it above 4.00 per dollar in October 2002, while December 2015 marked the end of a similar surge lasting over four years.

Only one period of negative correlation between the two currencies has resulted in a similar move in the peso. That was in January 2017, when dollar/peso snapped back 20% over the following six months from its record high above 22.00.

Futures markets highlight the degree to which traders’ views on the two currencies have diverged.

The chart below shows the difference between hedge fund and speculators’ net peso and real positions on the U.S. futures markets. The Commodity Futures Trading Commission data reflect the speculative trading community’s bias in any given asset.

(GRAPHIC: Brazil-Mexico FX – CFTC futures – https://tmsnrt.rs/2IflZQN)

Last month, traders were more bullish on the Mexican peso relative to the Brazilian real than at any time since CFTC futures contracts in the Brazilian real were launched in 2011. The gap between net long peso positions and net short real positions reached 174,00 contracts, CFTC data show.

That has since eased off by around 20,000 contracts, but it is too early to say if this is a turning point or not.

There are two schools of thought as to what happens next.

In the first, Brazil’s pension reform process hits another hurdle as the economy tips into recession, killing the recent upturn in positive sentiment. Investors would then broadly avoid emerging markets as the U.S. economic slowdown takes hold, sending the real into the same doldrums as the Mexican peso.

In the second scenario, U.S.-Mexico relations sour and Trump makes good on his threat to slap hefty tariffs on imports from Mexico. At the same time, pension reform in Brazil passes, boosting growth and investor demand for Brazilian assets.

In that scenario, the divergence would continue, pushing the correlation between the two currencies even deeper into negative territory and the divergence in futures markets to new highs.

“If Brazil delivers, we will have a huge technical move with investors unwinding long dollar/Brazil positions,” said one senior trader in Sao Paulo.

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Forex News

10 dead including gunmen in Brazil school shooting

Policemen are seen at the Raul Brasil school after a shooting in Suzano
Police are seen at the Raul Brasil School after a shooting in Suzano, Sao Paulo state, Brazil, March 13, 2019. REUTERS

Sao Paulo — The governor of Brazil’s Sao Paulo state said Wednesday that two young men wearing hoods and carrying several weapons opened fired at a school in the country’s south, killing eight people before taking their own lives.

Wednesday’s shooting happened in a public school in Suzano, a suburb of Sao Paulo, Brazil’s largest city.

Gov. Joao Doria said the two attackers were believed to be between 20 and 25 years old. He said authorities didn’t believe the two were former students.

Doria said the dead included two teachers and six students, and several more people had been hospitalized after sustaining injuries.

Doria said the school had been evacuated and police were inspecting possible explosives left by the shooters. “The school is on lockdown,” he said. 

Latin America’s largest nation has the largest number of annual homicides in the world, but school shootings are rare.

Brazil’s new President Jair Bolsonaro recently announced that gun ownership controls would be loosened.

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World – CBSNews.com

Ford to close oldest Brazil plant, exit South America truck biz

© Reuters. FILE PHOTO: New Ford trucks are seen at a parking lot of the Ford factory in Sao Bernardo do Campo © Reuters. FILE PHOTO: New Ford trucks are seen at a parking lot of the Ford factory in Sao Bernardo do Campo

By Marcelo Rochabrun, Alberto Alerigi and Ben Klayman

SAO PAULO/DETROIT (Reuters) – Ford Motor (NYSE:) Co said on Tuesday it will close its oldest factory in Brazil and exit its heavy commercial truck business in South America, a move that could cost more than 2,700 jobs as part of a restructuring meant to end losses around the world.

Ford previously said the global reorganization, to impact thousands of jobs and possible plant closures in Europe, would result in $ 11 billion in charges.

Following that announcement, analysts and investors had expected a similar restructuring in South America. Ford Chief Executive Jim Hackett said last month that investors would not have to wait long for the South American reorganization plan.

The factory slated for closure is in Sao Bernardo do Campo, an industrial suburb of Sao Paulo that has operated since 1967. It first produced a number of auto models before being switched predominantly to trucks in 2001. It makes the F-4000 and F-350 trucks, as well as the Fiesta small car, a sales laggard.

The factory closure may mean Ford is refocusing on the core of its car business in Latin America’s largest economy, based in a much newer factory in the northeastern state of Bahia. But the job cuts in Brazil’s industrial heartland represent a psychological blow for the new administration of far-right President Jair Bolsonaro, which is battling an unemployment rate above 11 percent.

Ford’s latest cuts come as investors watch for signs of progress on the company’s alliance with Volkswagen (DE:) AG, which already encompasses commercial vans and pickup trucks but may soon expand into electric and self-driving cars. The two automakers have also pledged to work together on other projects, which could include combining capacity in regions like South America.

Ford shares closed up 3.4 percent at $ 8.83 in New York.

"You can’t cost cut your way to prosperity in the long term," said David Kudla, who heads Michigan-based Mainstay Capital Management, a firm that previously owned Ford stock. "We want to hear about the future, what you’re doing for mobility services and autonomous vehicles."

The closure is also a blow to the industrial outskirts of Sao Paulo, where Brazil’s automotive industry was born and which long drove its industrial growth. It is also where imprisoned former President Luiz Inacio Lula da Silva came to fame as a union leader who organized massive strikes that helped harken the end of the military dictatorship.

The union in Sao Bernardo did not have an immediate comment. But Sao Bernardo Mayor Orlando Morando complained angrily that Ford gave no warning and failed to discuss the closure with the workers.

"The 2,800 families directly affected and another 2,000 indirectly affected deserved a chance to react. This is an act of cowardice," Morando’s office said in a statement.

A Ford spokesman declined to provide a precise figure for job cuts but acknowledged there would be "a significant impact" and said the automaker would work with unions and other affected parties on "next steps."

Ford South America President Lyle Watters said on Tuesday the automaker remains "committed" to South America, a region where it is not currently profitable.

SLOW GROWTH

Sales of Ford cars and light trucks grew by 10 percent between 2017 and 2018 in Brazil, lagging a 15 percent post-recession increase for the industry as a whole.

In the trucks business, it ranked fourth, with sales less than half those of Mercedes Benz and Volkswagen.

Ford said in October it would stop building its Focus compact cars in Argentina in May 2019 as part of efforts to end its losses in the region.

Kleiton Da Silva, an employee and union representative in Ford’s surviving Bahia plant, said the carmaker was in talks to cut 650 of its workforce there, which the automaker has said totals 4,604.

The No. 2 U.S. automaker expects to record pre-tax special charges of about $ 460 million, with most of that recorded this year, it said in the statement.

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Death toll in Brazil dam disaster nears 60, hundreds missing

Brumadinho, Brazil — Firefighters are carefully moving over treacherous mud, sometimes walking, sometimes crawling, in search of survivors or bodies left by a dam collapse that buried mine buildings and surrounding neighborhoods with iron ore waste. The confirmed death toll has risen to 58, with up to 300 people still missing, authorities said. In an ominous sign, nobody was recovered alive Sunday, a stark difference from the first two days of the disaster, when helicopters were whisking people from the mud.

The slow speed of search efforts was due to the treacherous sea of reddish-brown mud that surged out when the mine dam breached Friday afternoon. It is up 24 feet deep in some places, and to avoid the danger of sinking and drowning searchers had to carefully walk around the edges or slowly crawl out onto the muck.

Even those efforts were suspended for about 10 hours on Sunday because of fears that a second mine dam in the southeastern city of Brumadinho was at risk of failing. An estimated 24,000 people were told to get to higher ground, but by afternoon civil engineers said the second dam was no longer at risk.

Areas of water-soaked mud appeared to be drying out, which could help firefighters get to areas previously unreachable. Still, it was slow going for the search teams, and residents were on edge.

“Get out searching!” a woman yelled at firefighters near a refuge set up in the center of Brumadinho. “They could be out there in the bush.”

Hundreds missing after deadly dam collapse in Brazil

Brazilian searchers got reinforcements late Sunday, when more than 100 Israeli soldiers and other personnel arrived with plans to join recovery efforts.

Anger at mining company, and government

Throughout the weekend, there was mounting anger at the giant Vale mining company, which operated the mine, and questions rose about an apparent lack of an alarm system Friday.

Caroline Steifeld said she heard warning sirens Sunday, but there was no alert when the dam collapsed Friday.

“I only heard shouting, people saying to get out. I had to run with my family to get to higher ground, but there was no siren,” she said, adding that a cousin was still unaccounted for.

The carpet of mining waste also raised fears of widespread environmental contamination and degradation.

Dam Collapses in Brazil
A woman cries as she sees the damages caused by the mining waste a day after the collapse of a dam from an iron-ore mine belonging to Brazil’s mining company Vale in Brumadinho on January 26, 2019. / Getty Images

According to Vale’s website, the waste is composed mostly of sand and is non-toxic. However, a U.N. report found that the waste from a similar disaster in 2015 “contained high levels of toxic heavy metals.”

Over the weekend, courts froze about $ 3 billion from Vale assets for state emergency services and told the company to report on how they would help the victims.

Neither the company nor authorities had reported why the dam failed, but Attorney General Raquel Dodge promised to investigate. “Someone is definitely at fault, she said.”

Dodge noted there are 600 mines in Minas Gerais alone that are classified as being at risk of rupture.

Another dam administered by Vale and Australian mining company BHP Billiton collapsed in 2015 in the city of Mariana in Minas Gerais, resulting in 19 deaths and forcing hundreds from their homes.

Considered the worst environmental disaster in Brazilian history, that disaster left 250,000 people without drinking water and killed thousands of fish. An estimated 60 million cubic meters of waste flooded nearby rivers and eventually flowed into the Atlantic Ocean.

Sueli de Oliveira Costa, who hadn’t heard from her husband since Friday, had harsh words for the mining company.

“Vale destroyed Mariana and now they’ve destroyed Brumadinho,” she said.

Dam Collapses in Brazil
Animals trapped in mud near the town of Brumadinho in the state of Minas Gerias in southeastern Brazil, Jan. 27, 2019, a day after the collapse of a dam in a mine belonging to the mining giant Brazilian Vale. Getty

Other residents quietly noted that Vale was the main employer in the area.

“The company is responsible for a new tragedy, but it’s the principal employer,” said Diego Aparecido, who has missing friends who worked at Vale. “What will happen if it closes?”

Environmental groups and activists said the latest spill underscored the lack of environmental regulation in Brazil, and many promised to fight any further deregulation.

Marina Silva, a former environmental minister and presidential candidate, toured the area Sunday. She said Congress should bear part of the blame for not toughening regulations and enforcement.

“All the warnings have been given. We are repeating history with this tragedy,” she told the AP. “Brazil can’t become a specialist in rescuing victims and consoling widows. Measures need to be taken to avoid prevent this from happening again.”

Hope fades for survivors

In an email, Vale told The Associated Press that the area has eight sirens, but “the speed in which the event happened made sounding an alarm impossible” when the dam burst.

People in Brumadinho desperately awaited word on their loved ones. Romeu Zema, the governor of Minas Gerais state, said that by now most recovery efforts would entail pulling out bodies.

The flow of waste reached the nearby community of Vila Ferteco and an occupied Vale administrative office. It buried buildings to their rooftops and an extensive field of the mud cut off roads.

Some residents barely escaped with their lives.

“I saw all the mud coming down the hill, snapping the trees as it descended. It was a tremendous noise,” said a tearful Simone Pedrosa, from the neighborhood of Parque Cachoeira, 5 miles from where the dam collapsed.

For many, hope was evaporating.

“I don’t think he is alive,” Joao Bosco said of his cousin Jorge Luis Ferreira, who worked for Vale. “Right now, I can only hope for a miracle.”

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