By Daniel Christian Henrique
Diesel will put pressure on inflation
Brazil is still heavily dependent on diesel imports ( around 25 % to 30% of what it needs). And it gets worse: 70% of imports this year come from Russia - which is at war and under strong trade sanctions. And it gets even worse : the sanctions there created internal shortages in the country and decided to cut exports, including to Brazil (Correio Braziliense). And it gets even worse: OPEC+ and Russia reduced the production of barrels of oil in September (EPBR). Prediction 1 : it will be up to Petrobras to readjust its prices at refineries. Prediction 2 : and there will be even more left over for consumers to pay more for diesel at the pumps and put pressure on inflation until the end of the year.
Most affordable butcher shop? Calm down...
This was one of the most publicized news in the month of September in the financial news: meat reaches the lowest price in the last five years (2018) and returns to first place as the most consumed protein by Brazilians (Portal Correio). From January to July, there was a drop of 9.3%, according to records from the IPC - Fipe Consumer Price Index . The biggest reductions were, respectively: rump (-11.50%), filet mignon and sirloin (-10.17%), chuck (-8.49%) and picanha (-7.88%) (Canal Rural ( B)). Per capita availability (kg/inhabitant/year) reached 30.5% in July, equivalent to pre -pandemic levels (Conab). This greater supply of beef on the domestic market was also reflected in beef prices, which dropped 30% since the beginning of January (Diário do Nordeste).
But don't worry... despite the reductions, it doesn't mean the price is low... for many Brazilians it remains high and other proteins such as eggs, chicken, fish and pork will remain on the daily menu, now interspersed with beef (Mail Portal).
Planned and realized: Selic reduces by another 0.5 pp .
The COPOM meeting held in September by the Central Bank maintained what was announced at the previous meeting when the first Selic rate was lowered, implementing another cut of 0.5 pp . and by unanimous decision this time. Therefore, it ended at a rate of 12.75%. The promise of new cuts was maintained for the next meetings, but with a reservation note in this month's minutes giving the government a hard time to meet fiscal targets, so that inflation expectations remain within expectations. So everyone does their part! ( Infomoney ). Well, the population continues to expect a perfect match between the BC and the Government, leaving no room for their pockets.
Has begun? Capital market in view
With the beginning of the Selic low cycle, many investors were expected to gradually return to the capital market. But shortly after the first cut at the previous meeting announced by the Central Bank, some companies are already raising billions of dollars through debentures. Eletrobrás raised R$7 billion; TIM and Aegea also raised the R$5 billion mark. In total, up to August, R$110 billion in debentures had been obtained. Despite the increases, it will still not reach the level of 2022. You will need to wait for the next Copom (Estadão) meetings. With this month's new cut, these values will rise, as is expected a greater trading volume on B3.
Transport: became a parameter for the services sector
The growth of the services sector has been gaining momentum since the post-pandemic period, as we have already highlighted in several bulletins, and continues to gain ground. Compared to June, it increased 0.5% in July, according to data reported by IBGE this September. The biggest contributor was the cargo transport sector, which grew 5.8% between May and July - reaching a record value in its historical series. The research manager explains that the migration from physical to remote stores generated a boom in road freight transport, second only to the record harvests of corn and soybeans (IBGE (a)). In time: will our precarious highways keep up with this increase in growing demand for freight transport?
End of JCP? It is being processed
Project 4258/23 was taken to the Chamber of Deputies this September, carrying forward the purpose previously announced before ending the deduction of Interest on Equity in the calculation of Corporate Income Tax and Social Contribution from next year. The expected result is an increase in the tax burden for companies and an increase in revenue of around R$10.5 billion in 2024 (Agência Câmara de Notícias). Investors who invest more in the medium and long term and always compared companies' JCP and dividend values to see which was more worthwhile, start redoing the math! Follow the outcome of this change in the next reports - this will lead to a lot of discussion...
Two-time champion! Corn exports again at the forefront
September 1st marks the beginning of the 2024 agricultural year. Thus, the harvest that ended on August 31st showed Brazil as the leader in corn exports for the second consecutive year, in addition to the already traditional leadership in soybeans, surpassing the USA . Brazil accounted for 32% of corn exports, while the USA was much further behind with 23% (Revista Oeste).
Will you be champion?! Algodão targets the finals with the USA
Brazil's cotton agricultural production is the second largest in the world, second only to the USA - which in turn was hit by a severe drought, which could favor exports of Brazilian cotton plumes. The forecast is to export 3.2 million tons - an increase of 23% compared to the previous harvest, shipping 11 million bales of cotton. The severe drought meant that only 11% of the North American cotton harvest was classified as good ( AgroMais ).
Pork: it wasn't champion, but it broke its record
Brazil definitely cannot wage war with anyone! Our Agriculture supplies a significant part of the world and no one is left without our commodities. Pork reached an accumulated average of 100.9 thousand tons in export shipments in the year, the record in its historical series (Canal Rural (a)).
Record surplus: thank commodities again
And with such a large export volume of soybeans and corn, added to the strong volumes of meat, coffee and iron ore, Brazil achieved the record in its historical series of trade surplus for the month of September, which began in 1989. A drop widespread in all areas of imports also contributed to the collection of such an expressive balance (Diário de Pernambuco).
Goiânia + agribusiness + millionaires = very high standard real estate boom
And the luxury real estate market is doing well with such a volume of agribusiness breaking record after record and, obviously, catapulting many farmers to the level of millionaires. Goiânia, being the heart of agriculture in Brazil, was completely impacted: very high standard residential and commercial properties are landing in the capital of Pequi. The southwest of Goiás is heading in the same direction, with thriving agricultural cities such as Rio Verde, Jataí and Mineiros, but more focused on "only" high-end developments (!) and home upgrades ( RepórterMT , O Popular ) .
Food and beverages hold IPCA-15
The September inflation preview measured by IPCA-15 was 0.35%. However, with two contrasts: a slightly more significant increase of 2.02% in Transport and a drop of -0.77% in the Food and Beverages segment. This is the fourth consecutive month of decline in this segment, breaking the record for its historical series of lows. Record grain harvests generating greater supply in the domestic market and the drop in food prices at home were the main factors responsible for the decline in the segment in the month (IBGE (b)). FGV's IGP-M recorded similar inflation, equal to 0.37%, but it was the first increase after several months of deflation, which had been increasing since March. In the year to date, deflation was 4.93% (Correio do Brasil).
Unemployment rate drops a little more
In the moving quarter ended in August, the unemployment rate recorded another slight decline compared to the previous moving quarter (-0.1%) and reached the lowest value since 2015, with a percentage of 7.8%, according to data released in September by IBGE Continuous PNAD. In gross values, the unemployed population in the labor market reached 8.4 million, that is, 528 thousand fewer people compared to the previous quarter (Jornal do Comércio).
And consumption in homes grows
With the greater stabilization of income and employment in the post-pandemic period, coupled with the consecutive drop in food prices, consumption consequently increased, with Brazilians adding more items from the basic food basket to their daily diet. There was a 2.58% increase in consumption between January and August 2023 (State of Minas)
Make a Pix ? two
In May we announced that payment via Pix had already surpassed other payment methods in 2022. Now, this September, it surpassed its own record by registering 152.7 million transactions in a single day - September 6th (Agência Brasil).
GDP 2023 revived. Already 2024...
Throughout the month of September, the weekly survey by the Central Bank's Focus Bulletin recorded forecasts of an increase in GDP for the end of 2023 (closing in five consecutive increases, including the last week of August). In the last week, it went from 2.89% to 2.92%. As for 2024, nothing very optimistic, growth forecast of only 1.5% (Central Bank).
Saraiva: the end of an era?
The mess surrounding Saraiva's judicial recovery drags on. Now, what was once the largest book retailer in the country, announced on September 21 that it will close its last five physical stores. Reason: there was a 60% drop in revenue compared to last year (Gazeta de S. Paulo). Doesn't the Saraiva brand seem like that typical brand that was so strong in the past that in the future it reopens and picks up again?!
Gerdau and the American union
The strike that began on September 15th by the North American United Automotive Workers (UAW) union is affecting not only the automakers in the land of Uncle Sam , but also the Brazilian Gerdau - which will need to reduce its steel production there, consequently affecting profitability of its North American unit (Correio do Brasil).
References: Agência Brasil, Agência Câmara de Notícias, AgroMais, Banco Central, Canal Rural (a), Canal Rural (b), Conab, Correio do Brasil, Correio Braziliense, Diário do Nordeste, Diário de Pernambuco, EPBR, Estado de Minas, Estadão, IBGE (a), IBGE (b), Infomoney, Jornal do Comércio, O Popular, Portal Correio, Revista Oeste, ReporterMT, Gazeta de S. Paulo