Those who are banking on the BRIC countries to recover quickly should note a Reuters report about the deteriorating job situation in Brazil.
Brazil's economy shed the most amount of formal jobs in nearly 10 years in December as the global financial crisis took a toll on Latin America's biggest economy.
The economy cut 654,946 formal jobs in December, the worst loss since May 1999 and more than double the 319,414 jobs cut in December 2007, government data showed on Monday.
The figure was higher than the 600,000 job losses predicted by President Luiz Inacio Lula da Silva last week and more than double the 300,000 considered normal for the month of December because of seasonal factors.
The bulk of the job cuts came in industry, services, agriculture and the construction sectors, with the latter two especially hard-hit.
A look at some agro-chemical companies and related industries with exposure to Brazil through their conference calls:
Latin America as a whole continues to shift to premium corn seed hybrids, and that, combined with a richer trait mix in Argentina and Brazil specifically contributed to the gross profit improvement in the area. Based on our early read, we are on track to gain corn seed market share across the region, even as we are taking a cautious approach to credit through the second season in Brazil.
In South America our outlook is for the industry to be down 10% to 20% in fiscal 2009. Major factors weighing on the region are access to credit in Brazil and the drought conditions that plagued Argentina early in the planting season... There is a relatively large range in forecast farm net income for 2009, illustrating the extent of the market uncertainty in this part of the world.
An indication of the difficult credit situation in Brazil: Last year soybean farmers provided about 25% of their own crop input funding. This year it is twice as much, at 50%.
According to Chemical & Engineering News:
Within the chemical industry, companies as diverse as industrial gas maker Praxair and fertilizer producer Mosaic have warned of weak earnings in the fourth quarter of 2008 through the first quarter of this year.
Year-over-year growth in the manufacturing sector has slowed a bit... It has remained reasonably strong in South America and Asia driven by infrastructure spending. We see the impact of this primarily in our packaged gas volume but also in the slower but still positive growth in merchant liquid.
Our offshore segment experienced a fall off in demand due to a full distribution pipeline and weak farmer economics primarily in Brazil. Along with the inventory write-down noted earlier, this resulted in an operation loss of $120 million compared to operating earnings of $26 million a year ago.
I’m pleased to announce a new joint venture with Grupa Cabrera to produce sugar cane-based ethanol in Brazil… Bio diesel results have improved, especially in Brazil, with our new bio diesel facility at Robinopolous, Brazil… We see robust bio diesel demand in Brazil.
Brazilian Paper shipments declined due to lower demand in export markets… Input costs in Brazil and Europe are expected to be unfavorable in the fourth quarter… I would have to say all around the world probably that the demand dynamic is best in Latin America then it is anywhere else in the world now then I isolate it from what’s going on. But I was with 150 of our customers in the region and they were feeling pretty good about their business, which was two weeks ago, but not today.
There are lower exports going out of Brazil, little bit of weakness in the surrounding economies, but the Real strengthening has helped us. So, as regarded to opportunities for the pulp market down there. Our focus right now is to run what we have.