Swine Flu's Spread and Brazil
Swine flu is all the rage in the press these days it seems. And Mexico is suffering. The entire country has been placed under a virtual economic shut down as public assemblies have been banned and many open areas quarantined. Exports are now looked at with caution and US trade is likely to decline significantly. So what does this mean for the other major economy in Latin America: Brazil?
There are 2 diverging opionions on the issue:
- Swine flu will hurt Brazil, even if the disease doesn’t reach South America. The concern comes mainly from the agricultural sector, and particularly pork producers. Reuters reports that Pedro de Camargo Neto, chairman of the Brazilian Industry Association of Pork Meat Production and Exports, has asked the World Health Organization stop calling the outbreak “Swine Flu”. He thinks he’s got a better suggestion: “Mexican Flu”. Pork producers have just cause to be worried. Yesterday, the share price of JBS, one of the world’s largest meat producers, dropped 12% over fears that meat consumption would decrease because of fear of pork products.
- Swine flu will be a boon to Brazil’s economy. Bloomberg reports that yesterday, Analyst’s at France’s Credit Agricole announced that Brazilian bonds will increase in value as investors view Brazil as less risky than Mexico. One analyst said that swine flu leaves Brazil as the “sole strong power in Latin America.”
No matter what the case, Brazil will be an interesting case to watch to see how it continues to respond to the disease outbreaks to its north.
Graphic: Meat International.
