EU leaders prepare to take on bond markets
18 de novembro de 2010STJ define listas para vagas da OAB na tarde desta segunda-feira
22 de novembro de 2010International investors have pulled the plug on 6 billion reais (US$3.5 billion) in Brazilian timber investments after the Attorney General issued a finding limiting foreign investments in land, according to a local paper.
Leaders in Brazil’s commercial timber and pulp and paper industry told the Valor Economico newspaper published on Thursday that they recognized the government’s concerns over speculative capital driving up Brazilian land prices.
“But it is necessary to differentiate speculative capital from foreign productive investments,” the Executive Director of the Brazilian Association of Timber Producers Cesar Augusto Dos Reis said in the paper.
The government’s growing fear of a speculative land bubble could end an era of strong foreign investment in timber, a capital intensive industry which economists say is needed for Brazil to keep its growing pulp and paper industry supplied.
Reis said 6 billion reais in foreign investments have been frozen in timber alone after the Attorney General published a finding in August on a 1971 law.
The reinterpretation of the law closed a loophole allowing foreign investors to open locally registered companies and purchased land without restrictions on the size of the property that foreign capital is subject to.
“The problem is that national capital is never sufficient for handle all the projects needed to guarantee a growing supply of wood,” Reis said.
Leaders in the timber industry have echoed Reis’ comments.
Vice-president of project development at land management firm STCP, Joesio Sequeira, told Reuters in September his group has already suspended $3.2 billion in investments in timber and agricultural land including cane, cotton and soy projects in five different states.
Jean-Michel Ribieras, the chief executive of International Paper in Latin America, said the finding of the Attorney General “will cause Brazil to lose a lot of investments”.
Abundant sun, rain and land that can yield two grain crops a year when other countries only get one gives Brazil added appeal with investors. It has enough land to double current planted area. Even cattle and trees grow faster than in most other countries.
Otavio Pontes, the vice-president of Stora Enso in Latin America, said, “Future investments in the country could be hurt” by the finding.
Foreign funds have frozen land acquisition plans since June, when outgoing President Luiz Inacio Lula da Silva said he was concerned about local land falling into foreign hands.
Guilherme Cassel, his agrarian development minister, went further, saying that the Lula government did not want or need foreigners to buy farmland or produce in Brazil.
Jose Leal, the chief executive of land management firm Brazil Timber, said his company was planning to invest $250 million, were it not for the Attorney General’s finding.
“So long as there is uncertainty, they (the firm’s investors) are not going to invest in the country,” Leal said.
