Brazil Pulpmakers Drop as Currency Rally Hurts ExportsLucia Kassai
Fibria Celulose SA and Suzano Papel & Celulose SA, Brazil’s two largest pulpmakers, fell in Sao Paulo on expectation a strengthening currency will reduce profit from exports.
Suzano slumped 3.8 percent to 7.27 reais at the close of trading in Sao Paulo, the most since Dec. 13. Fibria, the world’s largest pulp producer, slid 1 percent to 24.40 reais. Brazil’s benchmark Bovespa index rose 0.6 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. The real gained 0.5 percent to 1.9859 per dollar today, the strongest level since July 2.
“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.
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