Brazil Pulpmakers Drop as Currency Rally Hurts Exports
Fibria Celulose SA (FIBR3) and Suzano Papel & Celulose SA (SUZB5), Brazil’s two largest pulpmakers, led losses in Sao Paulo on expectation a strengthening currency will reduce profit from exports.
Suzano slumped 3.6 percent to 7.29 reais at 12:15 p.m. in Sao Paulo after declining 4.5 percent, the most intraday since Dec. 13. Fibria, the world’s largest pulp producer, slid 2.3 percent to 24.09 reais. The benchmark Bovespa index fell 0.1 percent.
The Brazilian real rallied yesterday beyond 2 per U.S. dollar for the first time in almost seven months amid central bank efforts to shore up the currency and tame inflation.
“Pulpmakers rely heavily on exports, and the current scenario suggests exports won’t be as competitive as previously expected,” Luiz Roberto Monteiro, a broker at Renascenca DTVM, said in a telephone interview from Sao Paulo.
Fibria gets about 85 percent of its revenue from exports and Suzano’s shipments abroad account for more than half its sales, according to data compiled by Bloomberg.
To contact the reporter on this story: Lucia Kassai in Sao Paulo at lkassai@bloomberg.net
To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net
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