Uruguay’s Minister of Economy and Finance, Fernando Lorenzo, said yesterday that in the next two months “there is going to an enormous amount of volatility and confusion in the markets” due to speculation on when the US Federal Reserve will end its economic stimulus policies. Lorenzo went on to say the “Uruguay is prepared to confront it”.
Lorenzo emphasized the progress Uruguay has made in reducing “macroeconomic risks” and achieving “high rates of liquidity” which allowed Uruguay to access “contingency loans” (lines of credit) that today clear up concerns about Uruguay’s debt payments and how the country will finance spending.
The economy and finance minister made these statements during his speech to the first Latin American banking and economic conference organized by FELABAN and Banco República.
This Uruguayan Business Reports news article is a translation of a news article that appeared in the Uruguayan newspaper El Pais. The original article is available in Spanish here. Uruguay Business Reports translation by Donovan Carberry.
Port of Nueva Palmira (Photo from Uruguay’s National Port Administration
The head of the Nueva Palmira Port, Flavio Vaccarezza reported that from January to July the port moved 2,000,000 tons compared to 1,400,000 tons during the same period in 2012, a 43% increase.
Vaccarezza said that the port recently added a 200 meter mooring front. He explained that it is a “riverside quay which allows us to attend to a higher number of barges and, as a consequence, to satisfy the growth in demand for services that accounts for the increase in tonnage moved”.
The port also recently added an additional 22,500 square meters for merchandise storage which also allows it to receive more ships.
This Uruguayan Business Reports news article is a summarized translation of a news article written that appeared in the Uruguayan newspaper Ultimas Noticias. The original article is available in Spanish here. Uruguay Business Reports translation by Donovan Carberry.
Uruguay’s Economy Minister Fernando Lorenzo and United States Under Secretary Francisco Sánchez signing the customs agreement
Francisco Sánchez, U.S. Under Secretary of Commerce for international trade, met with Uruguayan President Jose Mujica to sign an agreement to improve the systems used by customs and border control.
Diego Cánepa, Uruguay’s Presidential prosecretary, said in the press conference following the signing that the agreement aims to solve “practical and technical problems” in the customs and border control systems.
“Many times there are agreements, but when they are put into practice practical problems arise” those old problems Cánepa explained will be corrected by this new agreement.
Sánchez said that President Mujica talked about the “importance of finding ways to lower trade barriers” and explained that the agreement “is one way” of doing that and “improving the system”.
Sánchez went on to say “We are talking about how to improve trade, not only between Uruguay and the United States, but regionally .. and of the need to use all the mechanisms, including Mercosur, to have more trade based in the agreements and the treaties and the systems that exist”.
Cánepa reported that although President Mujica’s visit to Washington to meet with President Obama, has been confirmed, the date still has not been decided. The trip will be take place sometime in the “next few weeks”.
This Uruguayan Business Reports news article is a translation of a news article that appeared in the Uruguayan newspaper El Pais. The original article is available in Spanish here. Uruguay Business Reports translation by Donovan Carberry.
ANCAP is analyzing mineral samples taken as part of its oil and gas exploration in the Cuenca Norte for the presence of radioactive elements such as Uranium, Ancap’s head of exportation and production, Hector de Santa Ana, told the Uruguayan newspaper El Observador.
Santa Ana explained that the drillings at Cañada del Charrúa and Pepe Núñez both achieved 100% continuity along the column of the shaft. “This not only permits us to study the geology and the oil system, but eventually the connectivity and the impact that could cause a probable oil field above the subterranean aquifers”, he said.
Now Ancap is working on several new concepts he added. “Particularly, along with oil we are looking for radioactive information in the subsoil. The generator rocks are also uranium traps. Clearly we don’t have sufficient information still, but we are working through the whole well using chemical analysis because radioactive energy producing minerals are under our [ANCAP’s] responsibility”, said Santa Ana.
Santa Ana said that studies of various onshore areas are “evolving step by step from the basic geology to more complete models with entrapments and oil systems. Businesses are taking advantage of these encouraging results to continue investing. The most important thing here is continuing the work”, he said.
This Uruguayan Business Reports news article is a translation of a news article that appeared in the Uruguayan newspaper El Observador. The original article is available in Spanish here. Uruguay Business Reports translation by Donovan Carberry.
The Brazilian oil and gas company Petrobras announced that starting in August 2013 Carlos Alberto de Costa will replace Iraní Verella as president of Petrobras Uruguay.
Carlos Alberto da Costa, the new president of Petrobras Uruguay. He replaced Iraní Varella.
In his first declarations da Costa said that “Petrobras’s challenge is continuing the way we started in Uruguay, where we are making important investments” and “working with a focus on modernizing the companies within the group”.
Da Costa is a geologist, who started working for Petrobras in 1978 and has held a wide range of positions with company in Brazil and other countries, among them: head of geophysics for Petrobras Brazil, business coordinator for Petrobras Venezuela, and head of exploration for Petrobras International.
Petrobras Uruguay controls 89 service stations as well as a network of lubricant and fertilizer distributers, an airplane fuel installation at Montevideo’s Aeropuerto Internacional de Carrasco, and 50% of Conecta y MontevideoGas [which Petrobras owns jointly with Uruguayan state oil company Ancap]. Additionally, Petrobas Uruguay, together with the Argentinean company YPF and the Portuguese company Galp, signed a contract with the Uruguayan government that enables the exploration and production of oil and gas in the sedimentary basins of Pelotas and Punta del Este.
This Uruguayan Business Reports news article is a translation of a news article that appeared in the Uruguayan newspaper El Pais. The original article is available in Spanish here. Uruguay Business Reports translation by Donovan Carberry.
Uruguay’s citrus producers are increasing plantings by 8%
According to data from Uruguay’s Ministry of Livestock, Agriculture and Fish (MGAP) between 2013 and 2015 Uruguay’s citrus producers intend increase the amount of citrus trees under cultivation by 571,537 plants.
That amount represents an 8% increase over current plantings which total 7,181,902. Tangerines will account for 44% of the new plantings, lemons will be 31%, and oranges will be 25%.
Uruguayan producers have increased plantings primarily because they have just received access to the United States market, a change which was announced in a July 10, 2013 press conference.
“Very probably, this will involve the need to reorganize the fields to adapt to the demands of the new market as several agents linked to the citrus industry have already expressed”, MGAP’s official statement explained.
The opening of the U.S. market is something the industry has been waiting 20 years for. Uruguay producers will enter the U.S. market on an equal footing with producers from South Africa, and Chile. Uruguayan producers currently face much higher tariffs then producers from South Africa or Chile when exporting to Europe, the principal destination for Uruguayan citrus exports.
This Uruguayan Business Reports news article is a summarized translation of a news article that appeared in the Uruguayan newspaper El Observador. The original article is available in Spanish here. Uruguay Business Reports translation by Donovan Carberry.
Lifan’s Model 320 on display at car show in China. Model 320’s are produced in Uruguay for the South American market.
For two years, Brazil has prevented Chinese automaker Lifan, which produces cars in Uruguay for the South American market, from exporting cars into the country. Lifan now has 2,000 vehicles sitting in Uruguay which were produced for sale in Brazil. After receiving special approval from Brazil, Lifan will resume exports with a shipment of 70 model 320 cars in the next few days.
Brazilian authorities solicited a series of documents from Lifan to certify that 35% of the parts in Lifan’s model 320 are Brazilian, a requirement of the special decree signed by Brazilian President Dilma Rousseff that lifted the ban which had blocked Lifan’s imports for the past two years.
Lifan will ship 70 of these cars from Uruguay to Brazil in the next few days. Lifan has not been allowed to ship into Brazil for the past two years.
Pablo Revetria, the head of Lifan Uruguay told the Uruguayan newspaper El Observador that Lifan has until October 29 to move the 320 and 620 model vehicles currently in Uruguay into Brazil.
Asked what Lifan would do if they were unable to export the cars to Brazil, Revetria explained that some cars could be sold on the Uruguayan market and Lifan is “very far along” in Venezuela’s import approval process. “When that process is completed we will be in place to move an important amount of stock”, Revetria said.
This Uruguayan Business Reports news article is a summarized translation of a news article that appeared in the Uruguayan newspaper El Observador. The original article is available in Spanish here. Uruguay Business Reports translation by Donovan Carberry.
Initial analysis by Uruguay’s government has concluded that while a few businesses control a significant amount of the market in both the Uruguayan meat processing and tanning industries that doesn’t mean either sector is over consolidated.
In July, President of José Mujica mentioned the possibility that consolidation had reduced competition with these industries and requested the Agriculture, Industry, and Labor ministries analyze the situation.
In the August 6th cabinet meeting Roberto Kreimerman, Uruguay’s Industry minister presented an advance of the study Mujica had requested.
Eduardo Brenta, Uruguay’s Labor Minister briefed the Uruguayan newspaper El País on Kreimerman’s presentation. Brenta reported that within Uruguay’s meat processing industry three Brazilian firms (Marfrig, JBS, and Minerva) control 38% of the Uruguayan market. However, they’ve actually lost market share since 2005 when they controlled 40% of the market.
Eduardo Brenta, Uruguay’s Labor Minister, spoke on possible over consolidation in Uruguay’s Meat Packing and Tanning sectors
Brenta explained that JBS’s market share has increased, while Marfig’s has decreased. “From this point of view we don’t seem, in principal, to have a problem; it would be different if one company bought the other” Brenta said. “It seems clear that the participation of one or others is very linked to prices. They are negotiating with producers that are strong and the climate has helped enough, therefore those that pay more are slaughtering more [cattle]”.
Brenta also reported that in the tanning sector, Zenda (which Marfrig sold to JBS) and Paycueros (owned by Argentineans) control 50% of Uruguay’s market. The other 50% is divided between five firms that control approximate 10% of the tanning market each.
The cabinet found that neither the market distribution in the tanning sector nor in the meat processing sector was concerning, although both industries are still being analyzed.
“[The analysis] reassured [us that no company] has obtained a dominant position nor can a group of businesses effect the rules of the game in either of the two markets” Brenta said.
Meat processors have participated in Uruguay’s tanning market for several years. Brazilian ownership of Uruguay’s tanneries has led in many cases to processed hides being sold in Brazil.
This Uruguayan Business Reports news article is a summarized translation of a news article that appeared in the Uruguayan newspaper El País. The original article is available in Spanish here. Uruguay Business Reports translation by Donovan Carberry.
The president of the Montevideo Stock Exchange (BVM), Pablo Montaldo, formally resigned from the position on August 4 because of differences with the stock exchange’s board of directors. Pablo Sitjar, the vice-president of the exchange will take his place.
Montaldo confirmed his resignation yesterday to the Uruguayan newspaper El Observador. He did not give any details about the motivation for his departure. A source a the Exchange told El Observador that “the door isn’t closed but it would be very difficult to reconsider his position”.
Montaldo had been president of the exchange since February 2011.
This Uruguayan Business Reports news article is a summarized translation of a news article that appeared in the Uruguayan newspaper El Observador. The original article is available in Spanish here. Uruguay Business Reports translation by Donovan Carberry.
Map showing Nueva Palmira, Uruguay’s principal port for soy exports. Nueva Palmira is now experiencing delays of up to 30 days to load soy exports
Soy and grain cargo going through Nueva Palmira is experiencing significant delays in loading. In some cases cargo has been delayed 30 days.
The president of Uruguay’s National Port Administration (ANP), Alberto Díaz, told the Uruguayan newspaper El País that theses delays are caused by the timing of ships arriving into Nueva Palimra port to load merchandise. “The sale of grain for export has unique characteristics”, said Díaz.
He explained that producers sell their grains in July, for example, but the boats charged with transporting them don’t arrive until the end of the month. “The seller sells their produce but the boat arrives in the last few days of the month. The seller is inside the deadline to comply with the request, but it generates a delay in the cargo for several weeks.” Díaz said. Regionally these delays are being seen mainly in Brazilian ports but also in Argentina.
“What we should do is try to improve access and cut down the time frames and find some benefits for the export sector” Díaz added. The ANP, which he heads, is in charge of coordinating all aspects of the supply chain passing through the port.
ANP is studying the possibility of loading merchandise at the floating station Punta del Arenal, located in the River Uruguay north of Nueva Palmira, to bypass the delays. ANP would only permit this option in the case of significant delays. If there weren’t delays at Nueva Palimra and exporters still wanted to use the floating station, they would face additional charges.
The majority of the grain being exported through Nueva Palmira is soy. All these exports are connected which is an important aspect of the harvest said Díaz. “Everyone wants to be the first to ship because that is when it [soy] has the highest value, later on the market begins to change and it trades at a lower price” Díaz explained.
This Uruguayan Business Reports news article is a translation of a news article that appeared in the Uruguayan newspaper El País. The original article is available in Spanish here. Uruguay Business Reports translation by Donovan Carberry.
Uruguay Business Reports 