(iStock.com/John Touscany)
The last full week of September featured relevant themes within the agro. The main highlight was Cade's approval for the deal between Minerva (BEEF3) e Marfrig (MRFG3), which yielded updated views from Goldman Sachs and Bank of America.
And while the market seeks to understand the consequences of the judicial recovery of AgroGalaxy (AGXY3), the head of Real Estate Funds (FIIs) at Acqua Vero Investimentos, sees that the movement causes fear, but highlights that there are healthy Fiagros in the market.
Furthermore, we heard from an expert from the Institute of Forestry and Agricultural Management and Certification (Imaflora) about methane emissions from Brazilian agriculture, as well as solutions to reduce greenhouse gas emissions.
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The themes that stood out the most in the last week
5th place – Why does Brazil want to postpone the start of the European Union’s anti-deforestation law?
O Brazil wants to postpone the new environmental law of European Union (UE), scheduled to come into force on January 1, 2025. The new legislation aims to prohibit the commercialization and import of agricultural products (cattle, coffee, palm oil, wood, rubber, soy and cocoa) resulting from deforestation that occurred after 2020.
For producing countries, including Brazil, the imposition disregards “national legislation and certification mechanisms of developing producing countries, as well as efforts to combat deforestation and commitments made in multilateral forums”.
Last week, the Brazilian Ministry of Agriculture and Livestock, through Minister Carlos Fávaro, sent a letter to the bloc asking for the postponement of the new rules, which they classify as “unilateral, punitive and discriminatory”. According to the ministry and Itamaraty, the measure impacts more than 30% of the country's exports.
4th place – BrasilAgro (AGRO3): BTG reduces target price, but highlights dividend yields of 11% amid new investment cycle
O BTG Pactual lowered its target price to BrasilAgro (AGRO3) from R$43 to R$31 (potential increase of 19%), reflecting the lower prices of commodities.
Despite this, the bank that reinforces purchases explains that AGRO3 presents an interesting dividend yield (DY) and broad growth opportunities in an expanding sector.
The bank, which participated in the Investor Day of the company, highlights that the opportunities in land acquisitions, mainly due to the fall in grains, with the strength of BrasilAgro's balance sheet positioning the company well to capitalize. According to the company, of Brazil's 851 million hectares, 19% are for livestock and only 14% for agriculture.
Top 3 do agro
🥉 3rd place – Cade approves operation between Minerva (BEEF3) and Marfrig (MRFG3) with restrictions
After a soap opera that lasted more than a year, the Administrative Council for Economic Defense (Cade) agreed to a R$7.5 billion agreement between Minerva (BEEF3) e Marfrig (MRFG3) involving the sale of 16 plants and a distribution center, signed in August 2023.
There are 11 beef plants in Brazil, an industrial unit in Argentina and another three in Uruguay, in addition to a lamb plant in Chile and a Distribution Center in Brazil.
However, Cade imposed restrictions on the sale of a plant in Goiás due to concerns that the operation would generate “excessive concentration” in the state.
🥈 2nd place – Raízen (RAIZ4): 'My biggest concern is the continuation of the drought in next year's harvest', says CEO
A Raízen (RAIZ4), the largest sugarcane processor in the world, sees the continuation of the drought in the coming months with greater concern for next year's harvest (25/26) than the possible impacts of drought and fires for the cycle current.
“My biggest concern is next year’s harvest. If the drought will last a long time. We are seeing what the weather will be like in November, December and January”, declared Raízen CEO, Ricardo Mussa, to Reuters, after participating in a seminar at the ROG.e fair, in Rio de Janeiro.
🥇 1st place – The default of the galaxies in AgroGalaxy (AGXY3): The effects of RJ for investment funds and in the field
Since last Wednesday (18), the market has been closely following rumors about a possible request for judicial recovery (RJ) of one of the consolidators of the agricultural input distribution market, AgroGalaxy, controlled by the Aqua Capital fund and with shares listed on B3.
More precisely, around 5:30 pm on Thursday (19), the “secrecy of justice” that hung over the petition requesting the favor of the judicial recovery of the companies that form the so-called: “Grupo AgroGalaxy” – as per name in the petition filed in court by the group's lawyers to obtain legal favor – with market fears materializing.
In his fortnightly column, the professor at Fundação Getúlio Vargas (FGV), André Passos, broke down the consequences of AgroGalaxy's judicial recovery for agriculture.