Brazil should see significant changes in the amounts of commodities it exports and imports if Congress approves a request to impeach President Dilma Rousseff, consultancy and brokerage firm INTL FCStone said in a report on Wednesday. FCStone projected that a change in the government, with current Vice-President Michel Temer taking over, would lift Brazil's real to 3.10 to the dollar compared to 3.54 currently, strongly affecting the competitiveness of some products abroad.
The firm said if the impeachment is rejected and Rousseff stays in, however, the real could fall to 4.10 to the dollar, increasing the price advantage of Brazilian exports. For soybeans, for example, FCStone says total exports this year could fall from the current estimate of 54 million tonnes to 50 million tonnes if the government changes and the real appreciates, shifting some buying to the United States. In the alternative scenario, Brazil could export as much as 56 million tonnes.
For sugar, FCStone says impeachment could reduce the sweetener's profitability in export deals, encouraging local mills to increase ethanol production to sell the fuel locally. The brokerage also thinks an eventual ousting of Rousseff would boost a current trend of corn imports, since foreign shipments would become cheaper for pork and poultry producers that are suffering with tight local supplies.
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