China launches probe into Brazilian broiler chicken imports

China on Friday launched an anti-dumping investigation into imports of Brazilian broiler chickens after a complaint from the domestic industry that the South American country has been selling its chicken below market value.

Brazil accounted for more than 50 percent of broiler product supplies to China, the world's No. 2 poultry consumer, between 2013 and 2016, according to a preliminary review, the Commerce Ministry said in a statement.

Any move to penalize imports, which are worth more than $1 billion a year, would be a major blow to Brazil's meat industry following a food safety scandal that threatened to tarnish the country's powerhouse protein industry.

ABPA, a group representing Brazilian chicken producers and exporters, denied they sell products below market prices, association president Francisco Turra told Reuters on Friday.

"We are very competitive and it is hard for the Chinese producer to understand," Turra said, reflecting on the surge of imports since the Chinese market opened to Brazilian poultry in 2009. "Such complaints are normal and we can defend ourselves."

Brazil faced similar claims from South Africa and Ukraine and won the cases, he said. Brazilian government officials did not immediately respond to requests for comment.

Shares of Brazil's BRF SA, the world's largest chicken exporter, fell 1 percent on Friday as the benchmark Bovespa stock index gained 0.2 percent.

A BRF representative declined to comment.

Brazil replaced the United States as the top chicken supplier after China slapped anti-dumping duties on U.S. broiler chicken products in 2010.

China is the biggest national consumer of Brazilian meat.

China relies on imports for its supply of white feather broiler chickens, which are favored by fast-food chains like KFC (YUM.N) and McDonalds (MCD.N) for their more rapid development and plumper meat. Yellow-feathered birds, which are native to China, are generally sold at retail.

The investigation comes just months after Beijing slapped hefty penalties on sugar imports from top growers such as Brazil and Thailand after lobbying by domestic mills.

In 2016, Brazil accounted for 85 percent of China's frozen chicken imports - almost 600,000 tonnes valued at as much as $1.23 billion, according to customs data.

The push by China's domestic industry for an anti-dumping probe came as poultry farmers and processors recover from the nation's worst outbreak of bird flu in years and struggle with falling demand.

"This is good news for the domestic chicken market," said a chicken farmer in northern China who gave his surname as Tan.

"The chicken market has been not so good since the second half of last year. Brazil is selling a lot to China at a cheap price while China has ample supplies itself."

In 2017, demand and output are expected to hit their lowest since 2006, according to U.S. government estimates. Domestic supplies are being hurt by low availability of grandparent breeder stock needed to produce more meat.

Worries about the deadly virus hurt demand for chicken meat and sent some regional prices to more than decade old lows in February.

Live broiler chicken prices in Shandong province, one of the nation's major producing areas, have since more than doubled, and were around 7.7 yuan ($1.15) on Friday, as the crisis passed and concerns about infection eased.

Import prices from Brazil have remained low in comparison, making it hard for the local industry to compete, analysts said.

Still, any curb on foreign supplies would likely boost domestic prices further, potentially denting demand for chicken as a cheap alternative to pork, the nation's favorite meat.

Broiler chicken sells for 14 yuan ($2.10) per kg, according to government data, almost one-third less than pork and more than 70 percent cheaper than beef and lamb.

Source: Reuters

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Brazil's Democratas party will launch presidential candidate in 2018

Brazil's conservative Democratas party will launch a presidential candidate in 2018, ending the polarization between the PSDB and the PT parties started in 1994, House speaker Rodrigo Maia said on Monday.

Maia said he will not run for president, opting instead to seek re-election as a lower house representative for the state of Rio de Janeiro.

Source: Reuters

China launches probe into Brazilian broiler chicken imports

China on Friday launched an anti-dumping investigation into imports of Brazilian broiler chicken and products after a complaint from the domestic industry that the South American country has been selling its chicken below market value.

Brazil accounted for more than 50 pct of broiler product supplies to China, the world's No. 2 poultry consumer, between 2013 and 2016, a Commerce Ministry statement said on Friday, according to a preliminary review.

Any move to penalize imports worth more than $1 billion a year would be a major blow to Brazil's meat industry following a scandal over its beef exports earlier in the year, which threatened to tarnish the country's powerhouse protein industry.

Brazil replaced the United States as the top supplier of chicken after China slapped anti-dumping duties on U.S. broiler chicken products in 2010.

China is the biggest national consumer of Brazilian meat.

China relies on imports for its supply of white feather broiler chickens, which are favored by fast-food chains like KFC and McDonalds for their more rapid development and plumper meat, compared with yellow-feathered birds, which are native to China and generally sold retail.

The investigation comes just months after Beijing slapped hefty penalties on sugar imports from top growers such as Brazil and Thailand after lobbying by domestic mills.

In 2016, Brazil accounted for 85 percent of China's frozen chicken imports. which totaled almost 600,000 tonnes valued at as much as $1.23 billion, customs data shows.

The push by China's domestic industry for an anti-dumping probe comes as poultry farmers and processors recover from the nation's worst outbreak of bird flu in years.

Chicken is a cheap alternative to pork, the nation's favorite meat. The outbreak hurt demand for chicken meat as people worried about catching the deadly virus and sent prices <0#JCI-BROILER> to more-than-decade lows in February.

Live broiler chicken prices in Shandong province, one of the nation's major producing areas, have since more than doubled, and were around 7.7 yuan ($1.15) on Friday, as the crisis passed and worries about infection eased.

Import prices from Brazil have remained quite low in comparison, making it hard for the local industry to compete, analysts said.

Shan Xuewei, a broiler chicken trader based in Shandong, said he believed the probe was unnecessary.

"Brazilian chicken is indeed cheap ... and people of course will go for the cheaper stuff."

Source: Reuters

Brazil softens budget deficit goals through 2020

Brazil's government loosened its budget targets for all years through 2020 on Tuesday, delaying prospects for a drop in the federal deficit after legislators repeatedly refused to raise taxes in the recession-hit economy.

Cost-cutting measures were announced along with the new targets, in a bid to demonstrate President Michel Temer's commitment to fiscal discipline even after his economic team cut forecasts for economic growth next year.

The revision, announced weeks earlier than expected, underscored the uphill battle for Temer to gather support for austerity measures as a corruption scandal simmers and next year's general elections approach.

Market reaction was muted as investors did not expect a surge in government spending despite the new targets. Ratings agency Standard & Poor's spared Brazil from a downgrade, saying after the announcement that it would maintain the country's debt rating at BB with a negative outlook.

Brazil's government set a new primary deficit target for this year and next of 159 billion reais ($49.7 billion), up from 139 billion reais this year and 129 billion reais for 2018.

The country will target a deficit of 139 billion reais for 2019, up from 65 billion previously. For 2020, it will aim for a 65 billion reais deficit compared with a 10 billion reais surplus previously - raising prospects of a seven-year-long period of consecutive budget deficits, started in 2014.

Brazil lost its investment-grade credit rating in 2015 after missing the goals for years. Temer, who replaced impeached President Dilma Rousseff in 2016, pledged to set realistic targets and meet them to regain credibility with investors.

Members of Temer's economic team, including Finance Minister Henrique Meirelles, previously wanted to wait until September to consider a looser budget target, but agreed to move up talks under pressure from a fractious coalition in Congress.

Most cost-cutting measures announced by Meirelles and Planning Minister Dyogo Oliveira on Tuesday will need Congress' approval. They include postponing public sector salary hikes by one year and reducing the entry salary for incoming civil servants.

Despite strong opposition to tax hikes, Meirelles said the government would still seek to roll back payroll tax breaks and would raise taxes on some investment funds.

The government did not announce expected infrastructure concessions. It forecast 2 percent growth in 2018, down from a previous estimate of 2.5 percent.

Source: Reuters

Brazil president weakened by graft charge, losing fiscal battle

Brazilian President Michel Temer has burned through political capital fighting corruption charges and is struggling to push forward his economic agenda meant to rein in a gaping budget deficit.

Even allies in Congress now doubt he can achieve anything but watered-down measures, likely delaying any fix to Brazil's fiscal crisis until the economy recovers from deep recession.

With continued deficits, Brazil risks further downgrades in its credit rating. It lost its investment grade two years ago, adding to the cost of financing mounting public debt.

In a sign of Temer's failure to restore fiscal health, the government is expected to revise upward its 2017 and 2018 deficit targets on Monday due to falling tax revenues in an economy that is barely growing.

More pessimistic analysts worry the insolvency already faced by some Brazilian states that cannot pay employees or provide basic services will reach the federal government.

Temer had a window to pass a pension overhaul earlier this year, but it closed in May when allegations emerged that he condoned bribes in a taped conversation with the then CEO of the world's largest meatpacker JBS S.A.."We are dancing samba at the edge of the precipice," said Sao Paulo-based wealth manager Fabio Knijnik. "I don't see the political class at all concerned with resolving this."

The deeply unpopular president won enough backing in Congress on Aug. 2 to block a corruption charge that could have led to his suspension pending trial by the Supreme Court. To survive, he approved about $1.5 billion in pork barrel spending to keep lawmakers happy.

His closest ally in Congress, the center-right Democrats Party of Speaker Rodrigo Maia, does not believe Temer has the 308 votes, or three-fifths of the lower chamber, needed to pass pension reform, the key measure in his fiscal rescue plan.

Speaking in Rio on Friday, Maia said Temer's political troubles and lower-than-expected tax revenues had created the crisis. He said Brazil had no alternative but to seek whatever pension fix it could, given Congress would not raise taxes.

Congressman Efraim Filho, the Democrats whip, told Reuters Temer must dilute the pension bill to get it past Congress. He said the measure had to be stripped down to its most important provision, a minimum age for retirement of 65 years for men and 63 for women in a country where people only work on average until age 54.

CRUMBLING COALITION

Temer's government coalition is in disarray. Parties who stood by the president are now demanding they be rewarded with cabinet positions, such as the big-budget Cities Ministry. It is now controlled by the Brazilian Social Democracy Party (PSDB), which split over whether to abandon the scandal-plagued president.

Until they get their way, the allies at the core of his coalition have said they will not put his proposed pension bill to the vote. Maia said the "climate" was not right to move to a floor vote and the bill could languish and miss a legislative window likely to close in December as an election year approaches in 2018.

The government has already made concessions on the pension bill provisions that will reduce planned fiscal savings by up to 25 percent in 10 years and nearly 30 percent in 30 years, according to Finance Minister Henrique Meirelles.

The pension overhaul is vital for Brazil to comply with a 20-year spending cap that was Temer's first move to restore fiscal discipline, albeit without a full impact on accounts until 2019.

"That ceiling was like saying you are going on a diet two years from now," said Daniel Freifeld of Callaway Capital, a Washington D.C.-based investment firm.

Source: Reuters

Brazil central bank chief says economy set to recover gradually

The Brazilian economy has stabilized and is set to recover gradually in coming months as interest rates continue to fall, Central Bank President Ilan Goldfajn said on Friday.

Speaking at an event in São Paulo, Goldfajn said economic consequences of increased political uncertainty have been limited. The central bank has cut its benchmark Selic interest rate by 500 basis points since October, helping Latin America's largest economy recover from the deepest recession in decades.

Source: Reuters

Brazil president's lawyers demand removal of top prosecutor

Lawyers defending Brazilian President Michel Temer against corruption allegations asked the Supreme Court on Tuesday to remove the prosecutor general from the investigation, arguing he is no longer fit to lead it.

In a filing to the top court, Temer's lawyers said Brazil's top federal prosecutor Rodrigo Janot, who has charged the president with taking bribes and has said more charges are imminent, was acting "beyond his constitutional limits."

"We are not, it has become clear, confronting mere institutional action," Temer's lawyers wrote in the document seen by Reuters. "Everything indicates that the motivation is personal."

Janot's office did not immediately respond to a request for comment.

The request will be decided by Supreme Court Justice Luiz Edson Fachin, the judge in charge of a massive investigation into political kickbacks. Legal experts said it was unlikely he would agree to remove Janot in the middle of the biggest corruption investigation in Brazilian history.

Temer, the first sitting Brazilian president to face formal corruption charges, got some relief last week when the lower house of Congress voted to block a bribery charge filed by Janot.

But Temer's opponents hope a second or even third charge from Janot could be based on more solid evidence of Temer's links to political bribes. That could push lawmakers to vote against protecting Temer from a trial as they worry about voters turning on them in next year's elections.

Under Brazil's constitution, any criminal charges leveled against a president must be approved by two-thirds of the lower house, and only then can the Supreme Court decide whether to put a leader on trial.

Temer was charged in June in connection with a graft scheme involving the world's largest meatpacker, JBS SA. Executives said in plea-bargain testimony the president took bribes for resolving tax disputes, freeing up loans from state-run banks and other matters.

Janot alleged that Temer arranged to eventually receive a total of 38 million reais ($12.14 million) from JBS in the coming nine months.

The prosecutor has said on several occasions that he is likely to soon file obstruction of justice and racketeering charges against Temer.

The case against the president is part of an unprecedented anti-corruption push that Brazil's federal police, prosecutors and some judges have pursuing for over three years.

Investigators have uncovered stunning levels of graft engulfing Brazil's political and business elites. Much of it centers on companies paying billions of dollars in bribes to politicians and executives at state-run enterprises in return for lucrative contracts.

Temer and one-third of his cabinet, as well as four former presidents and dozens of lawmakers, are under investigation or already charged. More than 100 people have been convicted, including former President Luiz Inacio Lula da Silva, who is free pending appeal.

Source: Reuters

Brazil's president expects weaker pension bill to pass

Brazilian President Michel Temer expects Congress to water down his proposal to overhaul pension rules and approve the new legislation by a slim majority this year, he said in a newspaper interview published on Saturday.

It was the first time Temer acknowledged there would be further changes to the proposal.

Legislators had already softened the bill earlier this year. Finance Minister Henrique Meirelles and other officials had been reiterating the importance of approving the overhaul without further changes to avoid a potential budget crisis.

Temer said he believed Congress will change the bill to have it merely set a minimum retirement age and cut public servants' benefits. The original proposal would also limit survivors' pensions, set tougher rules for rural workers and change the way retirement payments are calculated.

Another pension overhaul would probably be necessary within six years, newspaper O Estado de S. Paulo quoted Temer as saying.

Temer sees up to 310 votes in the Lower House of Congress, slightly more than the 308 needed, in favor of the proposal.

"We will do what is possible, and a possible reform will not be as thorough as it should," O Estado quoted Temer as saying.

Temer added that he saw no need to fire cabinet ministers to punish coalition parties that have not given their full support in Congress.

"Those who have not voted in line with the government will feel uncomfortable to participate in an administration that they are not supporting," Temer said. "I have the impression that they will end up leaving."

Temer said he expected interest rates to continue falling in coming months from the current 9.25 percent, with a 7.5 percent rate "very possible" by year-end.

Prosecutor General Rodrigo Janot charged Temer last month with taking bribes from meatpacker JBS SA (JBSS3.SA), which the president denies. Congress voted on Wednesday to block those charges from proceeding to the Supreme Court, but Janot may still bring additional charges in the case.

Temer said the prosecutor general was motivated politically and was not complying with his institutional role. Janot's term ends in September, and his successor, Raquel Dodge, was hand-picked by Temer in June.

Dodge will put the corruption investigations on the "right path", Temer was quoted as saying.

"The right path is to obey the law," he added. "Rigorously, to obey the law."

Source: Reuters

Brazil, Argentina prosecutors say governments interfering in Odebrecht probe

The top prosecutors of Brazil and Argentina are accusing their governments of interfering in the creation of a joint anti-corruption task force to investigate bribes by the Odebrecht engineering group so that politicians, many of whom are under investigation, can themselves control the exchange of evidence.

Brazil's Prosecutor General Rodrigo Janot said on Tuesday the two countries had agreed in June to set up a task force to allow the rapid and simultaneous investigation of bribes paid by Odebrecht, but the joint effort has not taken off.

"The task force is an essential tool without which we cannot join forces regionally to fight corruption," he told reporters.

A statement issued late on Monday by Janot and his Argentine counterpart, Alejandra Gils Carbo, accused the governments of their countries of interfering in the effort to jointly investigate the Odebrecht bribe network.

"The main authorities for international legal cooperation -- Brazil's Justice Ministry and Argentina's Foreign Ministry -- have placed obstacles and made requisitions that are an undue interference in carrying out agreements signed by prosecutors of the two countries in the Odebrecht investigation," the statement said.

"We hope the central governments support our efforts and urgently remove the obstacles that have been imposed," it said.

They said Brazil's Justice Ministry has sought to establish the rules of the joint force so evidence was shared through government channels and not directly between the prosecutors.

In Argentina, they said, the Foreign Ministry wanted to turn the task force into a treaty signed by the government, undermining cooperation between the actual investigators.

Odebrecht, Latin America's largest construction firm, is at the center of a global graft scandal. As part of a $3.5 billion settlement with Brazilian, U.S. and Swiss authorities in December, the company admitted to paying bribes in 12 mostly Latin American countries, including $35 million in Argentina, to secure lucrative contracts. Prosecutors in Argentina are also investigating four projects involving Odebrecht, the largest construction firm in Latin America, for corruption.

U.S. prosecutors said Odebrecht paid approximately $788 million in bribes in association with 100 projects in 12 countries between 2001 to 2016, through carefully disguised payments routed through a network of shell companies.

Janot said it was not the first time prosecutors have run into hurdles in setting up binational task forces to investigate international connections of Brazil's massive graft scandal first centered on contracts at state-run oil company Petrobras.

A task force proposed by Swiss prosecutors a year ago and another sought six months ago by Spanish prosecutors never got off the ground. "And now this one with Argentina," Janot said.

Source: Reuters

Urban art of Elephant Parade comes to Brazil's largest city

About 85 colorful elephant sculptures starting on Tuesday are adorning the streets and public squares of Brazil's largest city in the Elephant Parade Sao Paulo 2017 urban art exhibit.

The open-air exposition is headed by Dutch artist Mike Spits, who was inspired to mount the project on a trip to Thailand when he got to know Mosha, a baby elephant that lost one of its legs at six months of age when he stepped on an antipersonnel mine.

Source: EFE

For Brazil judge Moro, politicians not yet keen to fight corruption

Brazilian federal judge Sergio Moro, the man behind Brazil's largest ever corruption investigation, said there is still lack of interest from the country's political establishment to fight corruption, despite the political and economic crisis the practice sent the country into.

In one of his rare interviews and the first since the conviction of former president Luiz Inacio Lula da Silva, Moro told Latin American news outlets who comprise the "Investigate Car Wash" cooperative journalism group, that politicians think this is not a task they should consider as their duty.

"Unfortunately, I see the lack of a more vigorous attitude from Brazilian authorities regarding the problem of corruption," said Moro in the interview, which was partially published on Sunday by Brazilian newspaper Folha de S.Paulo.

"There is the impression that fighting corruption is only a task for policeman, prosecutors and judges," said Moro, the judge overseeing the so-called Car Wash investigation that has sent dozens of politicians and businessmen from Brazil's elite to jail.

Earlier this month, Moro sentenced Lula to nearly 10 years in jail after finding him guilty of accepting 3.7 million reais ($1.2 million) worth of bribes from engineering firm OAS SA, money prosecutors said the company spent refurbishing a beach apartment for Lula in return for his help winning contracts with state oil company Petroleo Brasileiro SA (PETR4.SA).

The ruling marked a stunning fall for one of the country's most popular politicians, and a serious blow to Lula's chances of a political comeback. The former president faces four more corruption trials and will remain free on appeal.

Current president Michel Temer also faces accusations of having taking bribes from meatpacker JBS (JBSS3.SA) to facilitate the firm's businesses in the country. Brazilian Congress will vote during the week if it allows or not the corruption charge to be sent to the Supreme Court for the leader to be put on trial.

In the interview, Moro hit back at criticism from Supreme Court judge Gilmar Mendes regarding some of the methods used by him during the Car Wash investigation, such as prison orders issued even before the trials.

"Judges have different understandings. There are no extraordinary law in the cases judged here. But in the Car Wash, to interrupt the cycle of crime, some drastic measures were needed," said Moro.

Source: Reuters

Brazil to shift funds from investments to police, air traffic

Brazil's government will redirect 2.2 billion reais ($700 million) from investments to essential services such as air traffic control to avoid disruptions caused by its austerity drive, Planning Minister Dyogo Oliveira said on Thursday.

With the Brazilian economy still reeling from its worst recession on record, policymakers have frozen about 45 billion reais in federal spending and raised taxes as they struggle to meet their budget target for the year.

In recent weeks, the fiscal discipline has started to disrupt services such as passport services, raising concerns about the feasibility of an agenda that many investors consider crucial for the long-term stability of public debt.

Oliveira said the government will seek to preserve essential services such as civil defense, federal police investigations and road and air traffic control at the expense of spending on public investments under the so-called PAC program.

The program originally had 36 billion reais earmarked for public investments in 2017 but successive budget freezes have whittled it to 19.7 billion reais.

Oliveira reiterated that he expects the budget freeze to be eased later this year with the help of one-off revenues.

Asked whether the government could change this year's budget target, Oliveira said he would not speculate.

Brazil is targeting a budget deficit of 139 billion reais this year before interest payments. The deficit in the 12 months through May reached 167.6 billion reais, equivalent to 2.59 percent of gross domestic product.

Source: Reuters

Brazil hikes mining royalties to ease budget deficit

Brazil unveiled plans on Tuesday to raise revenue from mining royalties by 80 percent, the latest measure to shore up government finances, and cut red tape in attempt to attract more foreign investment amid a weak economic recovery.

President Michel Temer, at the policy launch in the presidential palace, said that this fit into his broader plans to modernize regulation across sectors to draw investment and boost the economy.

"We are just scratching the surface here," Mining Minister Fernando Coelho Filho said, touting Brazil's potential to grow as a mining powerhouse if the government reduces red tape.

"These measures will be fundamental to speed up the growth of the Brazilian economy," he added, defending changes to outdated royalties and clearer rules for mining investors.

While some in the sector voiced support, mining industry body IBRAM, which counts Brazil's largest miner Vale as a member, criticized the policy, saying there was no way to cut costs enough to offset the higher levies.

"Mining companies feel pressured to pass on this new cost increase to the industrial production chain," it said in a statement. "This new condition will increase the risk of loss of competitiveness in the international market for ores."

Brazil's slow economic recovery has weighed on tax revenue, forcing the government to find new sources of funding. Last week, the government said it would raise taxes on fuel and increase a public spending freeze by 5.9 billion reais ($1.9 billion) this year.

Temer announced the first changes to the mining code since the early 1990s via a temporary presidential decree, which will require approval from Congress within 90 days. The royalties would go into effect in November, if approved, while other rule changes take effect immediately.

Royalties will increase by a set rate on diamonds, gold and other materials, while iron royalties will increase in tandem with the price of the mineral, gradually rising from 2 percent if the market price is less than $60 per tonne to a maximum of 4 percent if the price rises above $100 per tonne.

Raw materials used directly in construction would see royalties fall to 1.5 percent.

The royalties will be calculated on gross sales revenue, rather than net sales previously, significantly raising the base of calculation.

The government will also create the National Mining Agency to replace the National Department of Mineral Production that officials said would increase transparency and reduce bureaucracy.

Environmental licenses to miners are issued in four years in Australia but 10 years in Brazil, Coelho said, giving an example of red tape that must be reduced.

Higher Fines

The reforms could help attract billions of dollars in venture capital to Brazil's mining sector by creating an investor-friendly environment, said Ana Cabral-Gardner, a board member at miner Sigma Lithium and veteran mining banker.

"Previously a deadly regulatory combination of arcane rules, lack of transparency and opacity discouraged large established global investors," she said.

The measures would also increase fines for environmental damage up to a ceiling of 30 million reais ($9.47 million) and expressly require companies to clean up degraded areas. Brazil is still recovering from the 2015 Samarco mining disaster, in which a tailing dam burst and unleashed enough mud to fill 12,000 Olympic swimming pools.

Source: Reuters

Brazil's Temer says no more tax hikes, for now

President Michel Temer said on Friday that his government has no plans for now to raise taxes again in its effort to meet this year's fiscal target, one day after raising taxes on fuels and announcing an additional spending freeze.

"There is no plan. For the time being, our economic team is just looking at this increase (announced Thursday)," Temer told journalists during a meeting of the South American trade bloc Mercosur. He added: "I don't know if there will be a need for more later, but not now."

In a speech earlier, Temer said Brazilians would understand the need to raise taxes to shrink the budget gap and recover investor confidence in Brazil's overdrawn government accounts.

The tax hike was blasted by business leaders as the wrong way to go in restoring fiscal balance because it would hurt Brazilian's incipient recovery from its worst recession on record.

"Their reaction is natural; nobody wants more taxes. But I am sure this will pass when they understand that meeting the fiscal target is fundamental for the country's stability and encouraging growth," Temer said.

The Finance and Planning ministries announced on Thursday that the government was freezing an additional 5.9 billion reais ($1.9 billion) in federal spending this year, and increasing the federal PIS/Cofins social contribution tax on gasoline, diesel and ethanol to raise about 10.4 billion reais in new revenues.

Brazil plans to cut its budget deficit to 139 billion reais this year before interest payments. Earlier this year it had announced a budget freeze of 39 billion reais to meet that target. The deficit in the 12 months through May was at 167.6 billion reais, equivalent to 2.59 percent of gross domestic product.

Brazil lost its investment-grade rating in 2015 after missing budget targets for years. But slow recovery from a two-year recession has meant dismal tax revenues.

Source: Reuters

Brazil's Lula says he is being persecuted in court as supporters protest

Former Brazilian President Luiz Inácio Lula da Silva, a leftist leader who is topping polls for the 2018 election, on Thursday told supporters protesting his conviction for corruption charges that his political opponents were persecuting him in the courts.

In the main avenue of São Paulo, Brazil's biggest city, Lula took aim at Judge Sérgio Moro, who sentenced him to nearly 10 years in prison but allowed him to remain free on appeal, and the prosecutors leading the so-called Car Wash graft investigation.

"Since they're not able to defeat me through politics, they want to defeat me with lawsuits," he said.

Police declined to estimate of the number of people attending the protests in São Paulo, which Lula's Workers Party helped organize. Smaller rallies took place in other major cities, including Rio de Janeiro, Belo Horizonte, Porto Alegre and Fortaleza.

During his two terms as president between 2003 and 2010, Lula, a former union leader, helped to lift millions from poverty in Latin America's largest economy. But he also contributed to boosting the public deficit as a spending spree aimed at tackling the global financial crisis extended for years to come.

Should an appeals court uphold Lula's conviction, a ruling which is expected to take at least eight months, Lula will be barred from running for office next year.

Source: Reuters

Brazil tax revenues rise 3 percent in June from a year ago

Brazil's federal tax collection rose 3 percent in June from the same month a year ago after adjusting for inflation, the country's tax agency said on Wednesday.

The country collected 104.1 billion reais ($33.1 billion) in federal taxes in the month. Tax revenues rose 0.8 percent in the first half of 2017 compared to a year earlier.

Source: Reuters

Brazil congressional panel votes against putting Temer on trial

Brazilian congressional committee on Thursday voted against sending a corruption charge against President Michel Temer to the Supreme Court for the leader to be put on trial.

The vote is non-binding and the full house must still vote on the charge, which would only be approved if two-thirds of legislators vote for it.

Temer was charged last month in connection with a graft scheme involving the world's largest meatpacker, JBS SA. General Prosecutor Rodrigo Janot accused Temer of arranging to receive a total of 38 million reais ($11.85 million) in bribes from JBS in the next nine months.

The full house will vote on August 2, after a two-week recess. Though Temer's support has waned, he is widely expected to survive the full house vote.

Janot has said he expects to level at least two new graft charges against Temer in the coming weeks, however.

Several lawmakers have told Reuters in recent weeks that if they were forced into multiple votes to protect the deeply unpopular president from a trial, the chances of one of the charges being accepted by the lower house would greatly increase.

Temer, who replaced impeached President Dilma Rousseff last year, would be removed from office for at least 180 days if he were forced to stand trial in the Supreme Court.

Source: Reuters

Brazil's Lula vows to appeal conviction, run for president

Former Brazilian President Luiz Inacio Lula da Silva vowed on Thursday to appeal his conviction on corruption charges and run for president next year, calling the case against him a politicized effort to influence the 2018 election.

"They haven't taken me out of the game," Lula told supporters at the headquarters of his Workers Party a day after he received a nearly 10-year sentence for accepting bribes in return for helping an engineering company win contracts with state oil company Petroleo Brasileiro.

The ruling was a stunning setback for Lula, one of the country's most popular politicians, and a serious blow to his chances of a political comeback. The former union leader, who won global praise for policies to reduce harsh inequality in Brazil, faces four more trials and will remain free on appeal.

If his conviction is upheld on appeal, Lula will be barred from office, removing the front-runner from the 2018 race and opening the door to outsiders playing to widespread outrage over a deep economic recession and evidence of vast political graft.

But Workers Party (PT) leaders and Lula's defense team are working on strategy to delay the decision by an appeals court, using every legal tool available, such as multiple appeals, to slow the process down, possibly allowing Lula to run for the presidency before any appeals court ruling.

However, the head of the appeals court in charge of Lula's case, Judge Carlos Thompson Flores, told Bandnews radio on Thursday that the court would have a ruling finalized before the October 2018 election.

Senator Gleisi Hoffmann, leader of the PT, said that the party would protest Lula's sentence internationally, though she did not define where. Lula's legal team has already asked the United Nations Commission on Human Rights to examine the prosecution of Lula.

Lula remains Brazil's best-known politician and has retained a base of loyal supporters despite his legal woes. As president, he put resources from a commodities boom into social programs helping to lift millions from poverty.

Lula characterized the verdict against him as part of Brazilian elites' backlash against his legacy. He denied any wrongdoing and excoriated the decision handed down by Judge Sergio Moro, who has overseen a sweeping three-year graft probe.

Wearing a bright red shirt and a dark blazer, Lula made an appeal to fellow partisans that was folksy and upbeat, soliciting laughter and cheers from party elders and a crowd of hundreds outside the Workers Party offices in downtown Sao Paulo.

The former president said he continued to support strong democratic institutions, including police and prosecutors, but he lamented what he called politically-driven lies in the case against him.

Source: Reuters

Brazil's Senate approves labor overhaul by strong margin

Brazil's Senate on Tuesday approved the country's first major overhaul of labor rules in seven decades in a crucial victory for beleaguered President Michel Temer as he seeks to pull the economy out of its worst ever recession.

The bill, which modernizes some labor laws dating back to the 1940s, was passed in a 50 to 26 vote following approval in the lower house of Congress and will be sent to Temer to be signed into law.

The changes, which were opposed by trade unions, give more leeway to collective bargaining and reduce the scope for legal action in labor disputes in Latin America's largest economy. Remote work will become regulated and companies will get more flexibility to allocate work hours and vacation time.

Approval of the labor reform in the Senate did not necessarily mean Temer held enough support in the lower house to avoid being suspended from office later this month to be tried for corruption.

However, it showed continued support in his multiparty coalition for an economic agenda that investors see as crucial to reviving Brazil's economy.

Under the labor bill, labor union dues, currently mandatory, will become voluntary. The bill also gives more flexibility for part-time work and temporary contracts.

"We've raised our forecasts for job growth in coming years after we started to expect the labor reform approval," said Alessandra Ribeiro, an economist with Tendências Consultoria.


"The changes will make the job market more flexible and above all they will lower the risks associated with new hires."

Unions said the changes reduced job security while weakening their organizing power by eliminating mandatory union dues.

"None of us senators campaigned in our districts in favor of a labor reform," Workers Party senator Gleisi Hoffmann said on the Senate floor Tuesday during a failed opposition attempt to obstruct the vote. "None of you here was mandated to vote this reform."

Some senators within the ruling coalition also opposed some parts of the bill but agreed to pass the proposal exactly as approved by the lower house after Temer vowed to make a few small changes by provisional decree.

Many of Temer's proposals for the economy, including planned auctions for oil licensing rights and transport concessions, have remained on track despite the political crisis.

The government initiative most likely at risk, according to lawmakers, was a proposed overhaul of the social security system. It requires a supermajority of votes in both chambers of Congress to change the constitution.

Temer was charged last month with taking multimillion-dollar bribes, but the lower house of Congress must now vote on whether to allow the Supreme Court to try the conservative leader.

He has repeatedly denied any wrongdoing and refuses to resign despite polls showing his government's approval rating is in the single digits.

Source: Reuters

Google Earth to let users post stories, photos in coming years

Alphabet Inc (GOOGL.O) wants users to post millions of stories, video and photos on its Google Earth platform in the next few years, the program chief said on Tuesday at a launch event in Brazil for content focused on showcasing the Amazon rainforest.

The "Voyager" tool allows internet surfers to take interactive tours of exotic destinations on Google Earth led by the likes of primatologist Jane Goodall, with photos, information and maps.

However, regular users will be able to create their own unedited content for private or public use within two to three years, Google Earth Director Rebecca Moore told Reuters.

"The story of your family history, the story of your favorite hiking trip – it could be anything. It doesn't have to be profound," she said at the event in Sao Paulo.

Moore took the stage at an event in Sao Paulo to unveil the "I am the Amazon" project, which has mapped 11 sites to document the relationship between the rainforest and its people, touching on topics like food, water and cultural origins.

To tell the stories of communities such as the Yanomami people, Cinta Larga and the Boa Vista Quilombola, Google and partners used tools like 3D cameras to accompany satellite images with videos and text.

Moore did not reveal the budget for the project but she ruled out the idea of advertising on the platform and said it is not Google's intention to turn a profit from the venture.

"Google Earth is our gift to the world," she told Reuters. "In terms of budget, Google has nice revenue from advertising, and not everything Google does has to make money."

Source: Reuters