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Agribusiness could be affected by the production of ethanol and the devaluation of the real, with the direction of General Silva and Luna at Petrobras
President Jair Bolsonaro, after criticizing Petrobras for adopting “excessive and curved” prices, referring only to the fifth increase in fuel prices in 2021, announced on 19/02 that General Joaquim Silva would be the new CEO of Petrobras . With that, a series of factors came and may affect several markets, including the agribusiness sector, ethanol production and the devaluation of the real.
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Consequences for agribusiness:
One of the sectors most affected by this measure is the production of ethanol, since the rigidity in the amounts charged for diesel can be extended to gasoline, resulting in a drop in the competitiveness of fuels derived from sugarcane.
Another factor is the real devaluation, which is already expected. Economists highlighted that Bolsonaro's decision will result in a reduction of 5 billion reais in government revenue, but there is no indication that the amount related to the tax freeze will be offset.
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Replacement in the presidency of the state-owned company:
President Bolsonaro felt dissatisfied with the course of Castello Branco's management. The main criticism was with the successive increases in fuel prices at the refinery, which rose for the fourth time in 2020.
The company uses the so-called International Parity Price (IPP) to guide its value policy based on the price of a barrel of oil, which is traded in dollars.
“It is essential to ensure that the Brazilian market continues to be supplied without risk of shortages by the different actors responsible for serving the different Brazilian regions”, says the state-owned company.
In one day, Petrobras' share price fell by almost 8%, losing 28,2 billion reais. More than that, last Monday (22) it depreciated by more than 16%.
