Emergency Package

If you are consultant and broker dealing with Brazilian commodities, sooner or later you will face the challenging situation to explain to your foreign clients why their contract partners for Brazilian products like Sugar, Soy. Wheat, Corn etc. are foreign investment companies. And then you tell them how the agricultural sector is struggling to survive with the minimum required investments into infrastructure or covering simple operational costs of harvesting, production, refining, sales and distribution. One solution for a country with astronomic interest rates and spreads is the so called CPR -Cedula de Produto Rural Financeira, an anticipated sale of the future harvest output and production to obtain working capital. Who buys those titles mostly? Foreign Investors! Who deal with them? Brazilian banks.
Nevertheless the Brazilian government just announced on Friday to release an emergency package of up to R$ 14,6 billion to help the sector commercialize their products, pay their debts and provide private and public banks with funds to finance the sector.
Good idea, even when interest rates will still account for 8,75% p.a as part of the deal.
At least the government of the world´s 11th biggest economy keeps an eye on a sector which contributes with more than 8,4% to the country´s GDP and has a lot more growth rate potential...