AGP Executive Report

Power Storage: Brazil registered its first request for a closed-loop pumped-storage project under new rules. The 5.2-MW proposal in Santa Catarina marks an early test of the framework as regulators prepare price caps for battery-storage auctions. Poultry Trade: Newcastle disease outbreaks in southern Brazil are disrupting exports. China has limited its ban to Santa Catarina, while Mexico has suspended Brazilian poultry imports. Shipping and Industry: Brazil’s Merchant Marine Fund approved R$4.38 billion for projects in the South, supporting maritime capacity and regional investment. Critical Minerals: New rare-earth deals are drawing attention to Brazil’s emerging minerals sector, as the country weighs growth against environmental and community concerns. Biofuels and Land Rights: Quilombola communities in Pará say palm-oil expansion for biofuels has taken traditional land and restricted access, highlighting the social costs of Brazil’s energy supply chain.

Poultry Trade: China has limited its Brazilian poultry ban to Santa Catarina, while Mexico suspended imports after Newcastle disease was confirmed on a farm in southern Brazil. The EU Commission plans to propose restoring access for Brazilian poultry and honey. Export Markets: Brazil set procedures for tariff-quota exports to Norway from Nov. 1, covering products including meat, honey, corn and apples. Brazil-Guyana trade climbed 25% to US$800 million in the first eight months, with officials calling for more trade in agriculture, food processing, logistics and technology. Energy & Logistics: Brazil is pursuing farm-transport improvements as road freight rates rose 13% in Q3 amid higher diesel costs. Petrobras’ diesel discount to import prices is near a yearly high. Mining: Brazil’s Supreme Court reinstated the suspension of Belo Sun’s Xingu mine license, citing outstanding environmental and Indigenous-rights requirements.

Grid Modernization: Brazil’s grid operator set rules to validate models for solar, wind and battery projects, aiming to improve simulations as inverter-based generation grows. Power Investment: IFC and EDP announced $301 million in financing, including upgrades to electricity distribution in Espírito Santo and support for a 200-megawatt solar plant in Mexico. Poultry Trade: A Newcastle disease outbreak at a turkey farm in southern Brazil prompted a halt to poultry shipments to Malaysia and China, while Mexico suspended imports. Industrial Security: Braskem is rolling out Rockwell’s SecureOT system across 39 sites. Motorcycles: KTM opened its Manaus plant, designed to produce up to 20,000 motorcycles a year, with 3,500 units targeted for 2026.

Beef Outlook: Brazil remains the world’s largest beef exporter, but its production is projected to fall in 2027 as global output edges lower and exports stay nearly flat. Poultry Trade: A Newcastle disease outbreak at a Santa Catarina turkey facility has prompted a 60-day animal-health emergency and poultry transport restrictions. Mexico has suspended imports of Brazilian poultry, adding pressure to export markets. Energy & Trade: Russian diesel tankers are again bound for Brazil after Moscow lifted its export ban, while China is increasing purchases of Brazilian oil. Mining Logistics: Wärtsilä will supply engines for two river tugs built in Brazil to carry LHG Mining iron ore from Corumbá along the Paraguay-Paraná waterway.

Energy Exports: Brazil supplied China with 5.15 million tonnes of crude in September, up 18% year on year, and overtook Saudi Arabia as China’s second-largest supplier in the first nine months of 2026. Financial Services: Plus500 agreed to buy Brazilian broker-dealer Guru, expanding its local offer to stocks, futures, options and fixed income. Mining: Aura Minerals secured a US$200 million loan and acquired a Brazilian mining fleet, equipment leases and workforce for R$612 million. Critical-minerals investment is also drawing attention, with reports citing R$39 billion in planned investment and 129,000 sector jobs. Agriculture: Brazil confirmed Newcastle disease at a commercial turkey farm in Santa Catarina, suspending bird movements and raising export concerns. Soybean oil exports are rising as the country forecasts a record 2026–27 soybean crop. Manufacturing: KTM opened a Brazil plant with annual capacity of 20,000 motorcycles and a 2026 target of 3,500 units.

Poultry Exports: Brazil detected Newcastle disease at a turkey farm in Santa Catarina, raising concern over possible trade restrictions for the world’s largest chicken exporter. Critical Minerals: The sector supported 129,423 jobs in 2025, up 8.6% from 2023, according to a new National Mining Agency portal. Agroforestry Investment: BNDES approved R$250 million for Belterra to convert 4,000 hectares of degraded Amazon land to cocoa-focused agroforestry. Manufacturing: KTM has opened a Manaus motorcycle plant with annual capacity of 20,000 units. Energy: Brazil is pressing ahead with oil and gas expansion, even as Petrobras revives studies for an offshore FLNG vessel.

Fiscal Policy: Brazil plans to shift about R$20 billion in its 2027 budget to fund new programs, without raising the spending ceiling — a major test of how the government balances election pledges with fiscal limits. Manufacturing: KTM has opened a motorcycle plant in Manaus with annual capacity of 20,000 units, targeting 3,500 bikes this year. Energy: Petrobras has revived studies for a floating LNG vessel offshore Brazil, while new power-curtailment rules are unlikely to restore investment in large-scale solar. Shipping: Transpetro’s fleet expansion is expected to create local jobs. Amazon: Deforestation has fallen to its lowest level since 1988, a significant shift for Brazil’s forest and land-use sectors.

Poultry Exports: Brazil shipped 500,300 tonnes of poultry meat in September, up 3.7% year on year. The industry says a favorable EU audit could help restore exports to the bloc. Amazon: Deforestation fell 41.8% in the year to July, to 3,335 square kilometers — the lowest level since 1988, according to official data. Motorcycles: KTM opened an assembly plant in Manaus with annual capacity of 20,000 bikes and a 2026 target of 3,500 units, adding manufacturing capacity in Brazil. Labor Costs: Congress approved a shorter workweek, a win for Lula ahead of the runoff. Businesses warn the change could raise operating costs and inflation. Oil and Gas: Petrobras has revived studies for an offshore LNG vessel, while Brazil is preparing oil rounds near its first pre-salt production area. Brazil also recorded a rise in oil sales to China.

Manufacturing: KTM has opened an independent Manaus assembly plant for KTM and Husqvarna motorcycles, with capacity for 20,000 units a year. The R$20 million facility targets 3,500 bikes in 2026. Economic Pulse: Brazil’s economic activity rose 0.3% in August, in line with forecasts; industry grew 0.9% from July. Energy: Petrobras has revived studies for a floating LNG vessel offshore Brazil, while the government is preparing new oil rounds near the pre-salt region. Agriculture: Brazil is forecasting a record grain harvest, with more soybeans and less rice. Arabica prices also climbed as traders worried Brazilian supplies may not replenish low global stocks soon.

Motorcycles: KTM opened its Manaus plant, with capacity for 20,000 bikes a year and a target of 3,500 units by year-end. Oil and Gas: Petrobras has revived studies for an offshore floating LNG vessel, while Brazil is targeting an area near its first pre-salt production for new oil rounds. Power: New curtailment rules are unlikely to revive utility-scale solar investment, raising fresh concerns for developers. Aerospace: Embraer plans to buy a 51% stake in India’s Novavayu Aerospace, expanding its international footprint. Infrastructure: Potential auctions could attract R$54 billion after the election. Agriculture: Brazil forecasts a record grain crop, with more soybeans and less rice; the country’s Amazon deforestation rate also fell to its lowest level since 1988. Economic Activity: Brazil’s activity index rose 0.3% in August, matching forecasts.

Oil & Gas: Petrobras is revisiting a floating LNG vessel to handle rising pre-salt gas output, while regulators advanced studies of the West of Jubarte area for possible future auctions. Energy Trade: Brazil’s oil sales to China reached a record $21.8 billion through September, helping lift bilateral trade to $142 billion. Agriculture: Brazil forecasts a record grain harvest, with more soybeans and less rice, and China has opened its market to Brazilian pork offal. Industry & Infrastructure: Embraer agreed to buy 51% of India’s Novavayu Aerospace, while Cedro received environmental approval for a R$3.6 billion iron-ore export terminal in Rio de Janeiro state. Labor & Costs: Congress approved an end to the six-day workweek, prompting retailers and restaurants to warn of possible price increases.

Industry Policy: Brazil may offer targeted credit to help companies adapt to the shorter workweek and 2027 tax reform, with funding aimed at training, innovation and productivity. The 40-hour workweek is due to phase in by the end of next year, as businesses warn of higher costs. Energy & Logistics: Electricity theft cost an estimated R$11.5 billion in 2025, with R$7.9 billion passed on to consumers. Diesel imports are expected to peak later than usual as domestic output rises, while Cedro secured an environmental license for a 3.6-billion-real iron-ore export port in Rio de Janeiro. Manufacturing & Aerospace: Embraer plans to acquire a 51% stake in Mahindra Group’s Novavayu Aerospace, deepening its push into India’s aviation market. Agriculture: Brazil forecasts a record grain harvest, with more soybeans and less rice; meanwhile, Amazon deforestation fell 42% to a record low, and clearing in the Cerrado also declined.

Aerospace: Embraer agreed to acquire a controlling 51% stake in India’s Novavayu Aerospace, deepening its partnership with Mahindra and expanding its reach in India’s aviation and defence markets. The deal is expected to close by December 1. Mining and Logistics: Cedro Participações won environmental approval for its R$3.6 billion Porto do Meio iron-ore terminal in Itaguaí. The first phase can handle up to 15 million tonnes a year, with 3,000 construction jobs expected. Labour: Congress approved a shorter workweek, ending the six-day-on, one-day-off schedule. Businesses warn the change could raise operating costs. Mining Finance: Lending to mining companies in tropical forest regions rose 55% to $36.7 billion in 2025, while a new report flagged environmental and community risks, including at Brazil’s Grota do Cirilo lithium project. Aluminium: Alcoa reported stronger quarterly earnings and cash flow, and completed the restart of its Alumar smelter in Brazil.

Workweek Reform: Congress approved a 40-hour workweek, ending the six-day schedule while preserving pay and two days off. Economists warn the shift could raise labor costs by up to 20% for some employers and add to inflation. Pulp & Paper: Suzano says it may eventually combine its tissue business with Arbex, but is waiting for the joint venture to capture more gains as pulp faces oversupply. Energy: Petrobras is set to receive $859 million from partners in Santos Basin oil and gas fields. Industrial Exports: Eleven Brazilian machinery makers held 190 buyer meetings at Colombia’s FIB 2026, up 144% from the previous edition, with $2.35 million in projected business. Agribusiness: Brazil has opened 700 agricultural markets since 2023, strengthening export prospects as the country targets a leading role in global food supply.

Labor: Congress approved a constitutional amendment cutting Brazil’s standard workweek from 44 to 40 hours, with two days off and no salary reduction. The change is expected to benefit more than 30 million workers. Gaming: Entain’s Q3 online revenue fell 36% in Brazil as the online betting ban weighed on its results; the company kept its annual outlook, excluding Brazil. Textiles: A delegation of 22 Italian firms, including machinery makers, will visit Brazil next week for factory visits and meetings with local manufacturers. Aluminium: South32 shareholders approved the sale of assets to Alcoa, including a Brazilian alumina refinery, smelter and bauxite mine. Offshore: TMC Compressors won a contract to equip the Maromba FPSO, now being upgraded ahead of deployment in Brazil’s Campos Basin.

Offshore Energy: SBM Offshore has begun building the first of two Petrobras FPSO vessels for a $7.8 billion project, while TGS is expanding its Pelotas basin seismic survey by 11,200 square kilometres. Alumina: Hydro says gas supply problems at Alunorte could cost $90 million to $110 million in the fourth quarter as the refinery buys gas at market prices. Critical Minerals: Brazil’s new law covering fertilizer minerals could spur domestic investment and help cut reliance on imports, though regulations are still pending. Digital Infrastructure: Data-center growth is spreading beyond São Paulo to Rio, Fortaleza and southern Brazil, but power and licensing remain hurdles. Agriculture: Brazil has opened 700 agricultural markets since 2023, and Vice-President Geraldo Alckmin says the country could become the world’s largest food exporter by year-end. Workplace Safety: Alcoa reported a work-related fatality at the Alumar smelter in Maranhão during maintenance at its carbon plant.