Good morning! We’re covering the impacts of Chinese swine fever on Brazilian agricultural trade. The lowering approval ratings of President Jair Bolsonaro. An investigation into his presidential campaign. And Brazil’s new prosecutor general. (This newsletter is for platinum subscribers only. Become one now!)


China swine fever to slash Brazilian soybean exports

Chinese commodities trader COFCO said yesterday that it anticipates a severe drop in

soybean exports from Brazil to the Asian giant. This expected slump (from 7 million tons last year to 5 million in 2019) has been put down to an outbreak of African swine fever, which has devastated Chinese pig herds and reduced the demand for animal feed.</p> <p><strong>Why it matters.</strong> Almost one-third of Brazil&#8217;s exports are sent to China—and nearly half of the country&#8217;s commodity sales. Any kind of downturn from Beijing can cause major ripple effects on the Brazilian economy, as agribusiness—directly and indirectly—accounts for around 23 percent of the GDP.</p> <div class="flourish-embed" data-src="visualisation/708608"></div><script src="https://public.flourish.studio/resources/embed.js"></script> <p><strong>Silver lining 1.</strong> While the swine fever outbreak will hit soybean producers hard, Brazilian meatpackers have profited. With the swine fever harming China&#8217;s pork production, the country has gone on an importing spree, pushing meat prices up worldwide. The country&#8217;s imports of beef, pork, and poultry jumped nearly 70 percent between May and July, reaching USD 5 billion. Leading local producers saw their stock prices skyrocket.</p> <div class="flourish-embed" data-src="visualisation/708725"></div><script src="https://public.flourish.studio/resources/embed.js"></script> <p><strong>Silver lining 2.</strong> According to COFCO executives, Brazil&#8217;s successful corn harvest has pushed farmers and traders to switch their focus to the crop as opposed to soybeans. The company expects exports to China to jump from 2.5 to 3.8 million tons.</p> <hr class="wp-block-separator"/> <h2>President&#8217;s approval ratings hit lowest point</h2> <p>Respected pollster Ibope has published its latest survey on Jair Bolsonaro&#8217;s popularity—and the results are far from inspiring for the far-right president. With only 31 percent of the electorate considering his government &#8220;great&#8221; or &#8220;good,&#8221; Mr. Bolsonaro is the least popular among all democratically elected presidents in the first year of their terms.</p> <p>The poll reinforces a trend seen in other recent surveys, that Brazil is divided into three almost equal parts: Mr. Bolsonaro&#8217;s lovers, his haters—and a third of the electorate who has yet to choose which side to join.&nbsp;</p> <div class="flourish-embed" data-src="visualisation/708165"></div><script src="https://public.flourish.studio/resources/embed.js"></script> <p><strong>Why it matters.</strong> Alarm bells should be ringing for Jair Bolsonaro. With a poor relationship with Congress (more on that below), an economy which is still sputtering, and a lack of popular support, Mr. Bolsonaro is in dangerous waters, gathering all of the ingredients necessary for a political crisis.</p> <p><strong>Glass half-full.</strong> If Mr. Bolsonaro can take anything from this latest survey, it at least shows some level of stability. Since Ibope&#8217;s last poll, in June, the president has stopped hemorrhaging support. After his first month in office—when he spent most of his time in the hospital—almost two-thirds of the Brazilian electorate considered his start as &#8220;good&#8221; or &#8220;great.&#8221; He now appears to have settled on approval ratings around 30 to 35 percent.</p> <p><strong>Less is more.</strong> The data suggests that the best remedy for Mr. Bolsonaro&#8217;s unpopularity is to appear less—and be less controversial on social media. As it was at the beginning of the year, Mr. Bolsonaro was hospitalized earlier this month and had to lower his activity on Twitter. During this period, his approval ratings stabilized.</p> <hr class="wp-block-separator"/> <h2>Congress to investigate possible crimes by Bolsonaro campaign</h2> <p>A congressional hearings committee set up to investigate the spread of fake news for political purposes has triggered an alert within the government. The committee will summon companies and individuals hired by Jair Bolsonaro&#8217;s 2018 presidential campaign—including a current aide at the presidential palace—to speak before the investigation panel.</p> <p><strong>Context. </strong>These companies are all connected to a scandal unveiled just before the second-round vote in October 2018, which involved at least four marketing firms being illegally hired to <a href="https://brazilian.report/power/2018/10/25/whatsapp-scandal-jair-bolsonaro/">send hundreds of millions of messages to voters</a>, with content attacking Mr. Bolsonaro’s rival. The scheme was illegal as it did not appear on the books and as companies are simply not allowed to contribute to political campaigns. However, the reports never proved whether the campaign had hired these firms—or if it was the work of a rogue (and rich) supporter.</p> <p><strong>Why it matters.</strong> While electoral crimes <em>can</em> ultimately cost a president his or her term, this is rarely the case in practice. The Superior Electoral Court opened an investigation into the affair, but it has yet to make a single piece of progress on the case in almost an entire year.&nbsp;</p> <p><strong>Context. </strong>Electoral trials are usually kept up the sleeves of the political establishment, only to be used in accordance with convenience. That was what happened to former President Dilma Rousseff, who was ousted in 2016. Ms. Rousseff was accused of illegal campaign financing in 2014 and the electoral proceedings advanced as normal in the court system. However, when she was impeached by Congress for an unrelated matter, electoral judges decided to shelve the case, deciding not to pursue sanctions against her running mate-turned-president, Michel Temer.</p> <p><strong>Warning.</strong> Jair Bolsonaro is rapidly losing popular support. If his administration doesn&#8217;t start delivering economic results soon, the electoral justice&#8217;s machines could begin working against him.</p> <hr class="wp-block-separator"/> <h2>Brazil has a new, non-confrontational prosecutor general</h2> <p>After a five-hour confirmation hearing in the Senate&#8217;s Constitution and Justice Committee, Augusto Aras was officially appointed Brazil&#8217;s new Prosecutor General for the next two years. Senators approved his nomination by 68 votes to 10, and he is set to take office later this morning.&nbsp;</p> <p>During his afternoon in front of the Senate committee, Mr. Aras fielded a number of questions, in response to which he adopted a fairly sycophantic tone. He talked up the need for &#8220;constant dialogue&#8221; between institutions and in a nod to the sitting far-right government, he cast aspersions over the veracity of the 1964 military coup which brought in over 20 years of authoritarian rule in Brazil, saying it was &#8220;a movement which brought about change&#8221; and a &#8220;nebulous issue.&#8221;&nbsp;</p> <p><strong>Why it matters.</strong> As the head of the Federal Prosecution Service, Augusto Aras will be overseeing a number of cases which are highly sensitive to the government, including corruption investigations into the president&#8217;s son, Flávio Bolsonaro. The Prosecutor General also has the power to launch investigations into the president himself. Mr. Aras has come in for criticism for apparently &#8220;sucking up&#8221; to Jair Bolsonaro in order to win the nomination, and early suggestions are that the president may well have found his faithful lackey.</p> <p><strong>Senate.</strong> Yesterday&#8217;s committee session was a standard confirmation hearing, with Senators throwing softball questions at Augusto Aras, and the approval of the new Prosecutor General was never in doubt. Mr. Aras appeared well prepared, telling senators that Operation Car Wash was a &#8220;milestone in the fight against corruption&#8221; but that it needed some calibration.&nbsp;</p> <p><strong>Tension.</strong> The only nervous moment came when one gay senator confronted Mr. Aras about a letter he had signed which supported conversion therapy for gay people. &#8220;This letter establishes a &#8216;gay cure,&#8217; am I sick?&#8221; asked Senator Fabiano Contarato. Mr. Aras apologized, saying he hadn&#8217;t read the letter in full before signing.</p> <p><strong>Internal support.</strong> Augusto Aras&#8217; appointment was met with significant protests from fellow prosecutors, who believe he is not fit for the office. Mr. Aras now has the tough job of gathering support from within the prosecution services and the Executive branch. Straight after his confirmation hearing, he met with President Jair Bolsonaro for over an hour. Now, he is moving to appoint allies of previous Prosecutor Generals to key positions as a bid to quell a mutiny among his colleagues.</p> <hr class="wp-block-separator"/> <h2>What else you should know</h2> <p><strong>Federal Police. </strong>This morning, federal marshals arrested former governor of Tocantins Marcelo Miranda as part of an investigation into crimes of corruption, embezzlement, bid rigging, misapplication of public funds, receipt of unlawful benefits, falsification of documents and money laundering. Mr. Miranda has been elected Governor of Tocantins three times, yet has been impeached twice.</p> <p><strong>Car Wash.</strong> Supreme Court Justice Edson Fachin voted against a motion that would essentially overturn many Operation Car Wash-related convictions. He denied that defendants not collaborating with law enforcement should have more time to present their final arguments to court (as they could be implicated by those collaborating). The remaining ten justices still have to weigh in, and the trial will resume today. Among the possible beneficiaries of approving the motion would be is former President Lula—who has been in prison since April 2018.</p> <p><strong>Retail.</strong> Major Brazilian retailer Via Varejo is sending executives to China to benchmark credit solutions with tech giants Alibaba and Tencent. Chairman Michael Klein wants the company—which owns retailers Casas Bahia and Ponto Frio—to modernize a very ancient form of consumer credit, the so-called <em>crediário</em> (a form of payment in installments, based on fixed monthly payments with interests and adjusted for inflation).</p> <p><strong>Accountability.</strong> With a six-month delay, the Senate has finally inaugurated the chamber&#8217;s Ethics Committee for this legislature—with six of its 14 members currently under investigation. The senators tasked with overseeing the decorum of the upper house are suspected of having committed crimes such as corruption, money laundering, illegal campaign funding, and domestic violence. One of them has already been convicted of embezzlement and an impeachable offense—but the sentence was suspended.</p> <p><strong>Sanctions?</strong> A group of 15 U.S. congressmen—all from the Democratic Party—signed a non-binding <a href="https://grijalva.house.gov/index.cfm?sectionid=13&amp;itemid=2885">motion</a> asking the White House to roll back its rapprochement with the Jair Bolsonaro administration, including the suspension of Brazil&#8217;s status as a non-NATO ally and any military and law enforcement cooperation between the two countries. They declared that Brazil, &#8220;under the destructive and racist policies of the Bolsonaro government [&#8230;] is not the type of regime the [U.S.] should support.&#8221;</p> <p><strong>Jobs.</strong> For the fifth-straight month, Brazil registered a positive number of net jobs created in August. A total of 121,387 net positions were created last month—the third-best result for August since 2013. The average monthly salary for hires was BRL 1,619 (or USD 391), a bump of 0.44 percent from the previous month, and 1.97 percent from one year ago. On Twitter, President Bolsonaro celebrated the results, in a bid to take credit for them.</p> <p><strong>Bolsonaro v. Raoni.</strong> During his <a href="https://brazilian.report/podcast/2019/09/25/un-speech-bolsonaro-matias-spektor-mauricio-santoro/">speech at the UN General Assembly</a>, President Jair Bolsonaro accused Kayapó chief Raoni Metuktire—one of the world&#8217;s most prominent indigenous leaders and in the running for the Nobel Peace Prize—of being a pawn of foreign interests in the Amazon. One day later, Raoni responded, asking Mr. Bolsonaro to step down. He has fought the president&#8217;s defense of a wider integration of Amazon peoples into the Western lifestyle.

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BY Gustavo Ribeiro

An award-winning journalist with experience covering Brazilian politics and international affairs. His work has been featured across Brazilian and French media outlets.