AGP Executive Report

Aviation Fuel Shock: IATA says jet fuel prices are set to jump about 70% in 2026, pushing global airline profits to roughly half to $23bn and making fare increases “inevitable,” with the Middle East conflict and Hormuz risk driving the bill. Airline Operations in Brazil: At the IATA AGM in Rio, Cathay Pacific’s CEO said the group is holding capacity and network despite higher fuel costs, while LATAM Brasil reported engine-related groundings still biting. Engine Dispute: Italy’s ITA Airways said it will decide within 6–8 weeks whether to sue RTX/Pratt & Whitney over engine faults that have grounded a large share of its A320neo fleet. SAF Push: IATA highlighted Brazil’s potential to become a SAF leader, but warned sustainable aviation fuel supply remains far below what net-zero plans require. Energy Storage Deal: EVE Energy announced 67GWh+ in major orders at SNEC 2026, extending momentum in large-scale battery storage. Food Security Agenda: BRICS agriculture ministers meet in Indore to focus on food security, smart farming and farmer welfare, with Brazil included.

Aviation & Decarbonization: At the IATA 82nd AGM in Rio, IATA said Brazil has the conditions to scale sustainable aviation fuel (SAF), citing large biomass potential and 15 SAF projects in development, but warned the global SAF shortage is still severe and could leave airlines exposed to compliance penalties. Airline Profit Pressure: IATA also reiterated that the Middle East fuel shock is set to halve airline profitability in 2026, with jet fuel prices up sharply and net profits forecast falling to about $23bn. Agri-Food Costs: In São Paulo, chicken prices hit a five-month high as corn and soybean meal costs eased, improving producer margins. Nutrition & Supply Chain Angle: A new nutrition piece highlights magnesium-rich foods (like rice bran and blackstrap molasses), underscoring how agricultural inputs and processing affect public health. Policy & Trade: A Reuters report says the EU wants a tighter, more strategic COP31 climate negotiating stance after COP30 in Brazil stalled on key priorities. Regional Agriculture Diplomacy: India will host a BRICS Agriculture Summit in Indore focused on food security, farmer welfare, and climate-smart farming.

Aviation Profit Shock: IATA says global airline net profit in 2026 will be cut in half to about US$23bn, as Middle East conflict disruptions and a ~70% jump in jet fuel (to ~US$152/bbl) squeeze margins. Airline Capacity Pressure: IATA also warned of a delivery backlog of over 18,000 undelivered aircraft, limiting airlines’ ability to grow and cut emissions. Brazil in the Mix: Brazil is listed among top U.S. crude suppliers (about 414,000 bpd), underscoring how energy costs and trade flows are tied to industrial competitiveness. Aviation Safety in Southern Africa: IATA and the Southern African Development Community push to standardize aviation logistics safety approaches, with implementation blueprints in progress. Retail Investing Buzz: SpaceX’s IPO is drawing retail demand, with reports of up to 30% of shares earmarked for individuals—another sign of risk appetite spilling into industrial tech. Food & Trade Events: THAIFEX–Anuga Asia 2026 in Bangkok drew 3,590 exhibitors and nearly 95k trade visitors, highlighting ongoing global sourcing and F&B innovation momentum.

Aviation Economics in Rio: IATA’s 82nd AGM in Brazil warned that global airline profits in 2026 could be cut in half to about $23bn, as Middle East conflict drives jet fuel prices up roughly 70% and disrupts Gulf air corridors—pushing margins down and raising bankruptcy/consolidation risks. SAF & Decarbonization Reality Check: IATA also said sustainable aviation fuel still covers under 1% of jet demand, with production lagging and costs rising, making the net-zero plan harder to deliver. Brazil’s Aviation Sector Snapshot: IATA highlighted Brazil’s aviation’s economic weight—jobs, value added, and tourism spillovers—while noting demand patterns are shifting under uncertainty. Airline Fleet & Supply Chain Pressure: LATAM executives at the same Rio summit complained about widebody delivery delays (including Boeing 787 timing) while preparing new Embraer 195-E2 routes in Brazil. Industrial Tech & Talent: Huawei’s ICT Competition drew 220,000+ students across 100+ countries, signaling continued skills demand for Brazil’s tech and industrial automation pipeline. World Cup as a Business Magnet: FIFA’s 2026 tournament rollout and related media/venue coverage keep spotlighting Brazil’s role in global sports logistics and consumer spending.

Aviation Fuel Shock in Brazil: At IATA’s Rio summit, airline chiefs warned that the Iran war is pushing jet fuel costs up while aircraft shortages from Boeing/Airbus delays force carriers to keep older planes longer—hurting margins and prompting capacity cuts; Embraer CEO Francisco Gomes Neto said some airlines are delaying option decisions, and IATA expects more consolidation as budget carriers feel the squeeze. Brazil-US Trade & Payments Pressure: The U.S. trade office flagged Pix under Section 301 as a “burden” on American services providers, while separate coverage highlights rising compliance and legal risk for firms tied to Brazil’s newly designated criminal groups. Security & Compliance Fallout: The U.S. designated Brazil’s Comando Vermelho and PCC as terrorist organizations, triggering sanctions and raising the stakes for crypto, banking, and cross-border business. Food & Farm Risk: FAO data showed May food prices broadly stable but cereals, including wheat, rose on weather and input-cost uncertainty; El Niño forecasts add downside risk for parts of Brazil and Latin America. Health & Environment Watch: A study in North Brazil found mercury in pregnant women in the Munduruku territory at 4.5 times WHO-safe levels, with contamination likely passing to babies. Industry Tech Adoption: A BCG study found many office workers use AI and save time, but companies struggle to turn that into measurable productivity gains.

Aviation & Logistics: Azul says it will keep cutting frequencies as jet-fuel costs stay elevated after the Iran war, while global airline chiefs gather in Rio for IATA’s AGM amid fuel-price volatility and aircraft-delivery delays. Energy Storage: Brazil is preparing a major battery auction (at least 2 GW) as the world shifts from solar-and-wind growth to storage for grid reliability. Defense Procurement: Sweden’s Saab says Brazil is interested in buying up to 20 more Gripen fighters, building on its existing order for 36. Agri & Food Security: Warnings grow that El Niño could hit agriculture hard, adding pressure to already-stressed food prices. Payments & Industry Tech: Pix is boosting Brazil’s digital payments ecosystem, challenging dominance fears. Trade & Compliance: The U.S. is moving ahead with Section 301 tariffs targeting Brazil over trade practices, raising costs risks for exporters. Wildlife & Innovation: A thermal drone helped rescue an injured ocelot in Minas Gerais, showing practical tech gains beyond the lab.

AI & Water Use: A new UNU-INWEH report warns AI data centers could consume 9.3 trillion liters of water annually by 2030—about enough for 1.3 billion people—adding a fresh environmental cost to the AI boom. Food & Biofuels: A T&E study says aggressive biofuel targets could push global biofuel use up 30% this year and 70% by 2030, squeezing food prices and worsening fertilizer shortages. Food Prices Watch: The FAO says world food prices slipped in May, with vegetable oils down 4.6% while cereals and sugar rose, keeping markets near multi-year highs. Trade Pressure on Brazil: The U.S. is moving ahead with Section 301 forced-labor tariffs, proposing 12.5% for countries including Brazil unless they adopt enforcement mechanisms. Agri-Business & Logistics: IATA expands cargo services in Brazil, Mexico and Paraguay, signaling continued investment in air freight capacity. Mobility & Services: Uber launched in Nepal, testing models that could later expand into food and courier—relevant for regional ride-hailing competition. Brazil Industry Angle: Brazil’s inequality continues to fall, with education-linked gains lifting incomes and expanding the middle class.

Trade & Tariffs: The U.S. USTR proposed new Section 301 tariffs tied to forced-labor claims, with a public comment window running to July 6 and a July 7 hearing—Brazil is among the targeted economies, raising compliance pressure for exporters and importers. Customs Enforcement: A new U.S. executive order overhauls the “importer of record” rules, tightening who can file and increasing disclosure and certification requirements, with implementation deadlines in 90 and 180 days. Aviation & Logistics: IATA is expanding cargo services across Latin America, including CASS rollouts and real-time billing tools, signaling more digitized freight operations for Brazil-linked supply chains. Defense & Aerospace: Brazil plans to buy 20 more Saab Gripen jets, accelerating replacement of aging F-5 fighters and boosting long-term local aerospace capacity. Food & Agriculture: FAO reports global food prices broadly stable in May, with cereal and sugar gains offset by drops in vegetable oils and dairy—relevant for Brazil’s agribusiness planning. Energy & Geopolitics: The Strait of Hormuz risk is reshaping global shipping and insurance costs, while Brazil and others ramp production to offset disruptions.

OECD Industrial Policy: Korea’s trade minister Yeo Han-koo used the OECD ministerial in Paris to push for smarter industrial policy that boosts manufacturing productivity and clean energy without undermining open trade. Biofuels vs. Food Prices: Rising oil prices are driving a surge in biofuel demand (including Brazil), but analysts warn “food for fuel” could worsen food inflation and raise global crisis risk. Brazil Energy & Oil: Brazil plans to ramp domestic oil output about 30% by 2032, aiming to become a top global supplier as markets scramble for non–Strait of Hormuz supply. Agri-Food Sustainability: China agreed to buy certified deforestation-free Brazilian beef, signaling growing demand for traceable, forest-friendly supply chains. Trade Friction: The U.S. proposed forced-labor tariffs that could hit major exporters, with Brazil among those facing potential spillovers. Shipping & Shipbuilding: SAFEEN Drydocks won $354m in vessel contracts, reinforcing maritime construction capacity tied to regional logistics needs. Climate & Cities: UNEP backs passive cooling over air conditioning as heat intensifies, with outdoor and informal workers most exposed.

Data & Insurance for AI infrastructure: Zurich expanded its Data Center Project Guard into Brazil and other markets, offering construction and delay-in-start-up coverage as AI drives a new wave of datacentre builds. Broadcast tech rollout: GatesAir opened a new Brazil office in Minas Gerais to assemble and service TV/radio transmission gear, aiming to speed support for the DTV+ transition. Aviation decarbonization: IATA pledged closer work with ICAO on transparent tracking of sustainable aviation fuels (SAF), as airlines also juggle jet-fuel price shocks. Energy exploration: Petrobras secured an Ibama licence renewal for a three-well offshore programme in Brazil’s Potiguar basin, with drilling expected in 2H26. Telecom expansion: BNDES approved BRL 10m to build about 162 km of fibre optic transport in rural São Paulo. Trade pressure on Brazil: The US proposed forced-labour tariffs that could reach up to 12.5% for Brazil, adding uncertainty for exporters and supply chains. Agrifood sustainability: China agreed to buy 50,000 tonnes of deforestation-free Brazilian beef by end-2027, betting on traceability and forest-friendly sourcing.

Aerospace & Defense: Saab unveiled the first two-seat Gripen F for the Brazilian Air Force, built through long-running industrial cooperation that’s trained hundreds of engineers and technicians and now moves into flight testing. Energy Storage & Renewables: Investors including Brookfield and Brasol are lining up for Brazil’s first battery auction, aimed at helping storage buy power from struggling renewables—though the auction is slated for December. Agri-Food & Sustainability: Chinese meat traders began buying Brazil’s first deforestation-free beef under the Beef on Track certification, with audits tied to illegal clearing, protected areas, and labor checks. Trade & Industry Risk: The U.S. proposed new forced-labor tariffs of 10%–12.5% on nearly 60 economies, including Brazil, raising compliance and cost pressures for exporters. EU Market Access: Brazil is scrambling to meet EU antibiotic rules for beef by Sept. 3, with traceability gaps threatening access. Logistics & Ports: AD Ports agreed to acquire Brazil’s CLI in an $835m deal, expanding its agri-bulk logistics footprint. World Cup Business: Brazil’s World Cup Group C spotlight continues as fans and hospitality operators watch demand and pricing ahead of the tournament.

US Tariff Shock for Brazil: The Trump administration is proposing new forced-labor tariffs, including a 25% levy on Brazilian imports, drawing an angry response from President Lula and raising new uncertainty for Brazil’s exporters. Energy Storage Push: Brazil’s regulator Aneel approved rules for energy storage systems, aiming to expand battery projects beyond behind-the-meter use and set the stage for a storage capacity auction before end-2026. Renewables Investment Risk: BlackRock’s Atlas Renewable Energy paused a planned $1B Brazil investment after grid operator curtailments, highlighting how market design can punish solar and wind developers. Rare Earth Industrial Bet: USA Rare Earth plans a $1.2B rare-earth magnet facility in South Carolina, while Brazil remains in the mix via planned rare-earth mining supply. Agribusiness & Tech: Uncover raised $16M to expand its marketing measurement platform into the U.S., while Brazil’s Indigenous land-protection rules are criticized for being renewed without stopping invasions. Controlled Environment Agriculture: A new report forecasts rapid growth for controlled environment agriculture, a signal for Brazil’s future food-tech and high-yield production ambitions.

US Tariff Push on Brazil: The U.S. Trade Representative floated a broad 25% tariff on Brazilian imports after a trade probe into “unfair practices,” adding pressure on Brazil’s exporters and supply chains. Agribulk Logistics Deal: AD Ports Group agreed to buy Brazil’s CLI (Corredor Logística e Infraestrutura) in an ~$835m deal, boosting its agrifood export terminal footprint at Santos and Itaqui. Cotton Outlook: ICAC expects China, the U.S., and Brazil to cut cotton acreage in 2026-27 as input costs rise and profitability weakens, with global area and production forecast to decline. Defense & Metals: 6K Additive won a $1.95m U.S. Defense contract to turn domestic scrap into strategic metal powders, with niobium supply linked to Brazil flagged as a key dependency. Aviation for Brazil: Saab rolled out the first two-seat Gripen F for Brazil’s air force, starting flight tests before delivery. World Cup Build-Up: Philadelphia detailed security and logistics for the 2026 tournament, while Brazil’s World Cup squad rankings and fan planning content kept attention on matchday momentum. Brazil Compliance Risk: The U.S. designated Brazil’s PCC and CV as terrorist organizations, raising legal and compliance stakes for companies with regional exposure.

Port & Logistics Deal: UAE’s AD Ports Group agreed to buy Brazil’s agribulk terminal operator CLI for about $835m (AED 3.1bn), gaining sugar and grains gateways at Santos and Itaqui and aiming to deepen its food logistics footprint across South America. Agribusiness Exports: China officially recognizes all Brazil as foot-and-mouth disease-free, reopening room for expanded Brazilian beef and pork shipments. Macroeconomic Outlook: The IMF said Brazil’s economy shows “remarkable resilience,” projecting growth around 2.5% in the medium term while flagging downside risks from geopolitics and tighter finance. Trade Tensions: The US proposed 25% Section 301 tariffs on many Brazilian imports, while also signaling “nuanced” exclusions; more Section 301 findings are expected soon. Industrial AI: Siemens launched Intelligence Center X to help companies scale industrial AI from pilots to production with human-in-the-loop orchestration. Food & Feed Manufacturing: ADM inaugurated a new premix and feed additives plant in Apucarana, Paraná, focused on traceability and segregation for Brazil’s protein value chain. Rare Earths Supply Chain: USA Rare Earth selected Cherokee County, South Carolina for a $1.2bn magnet manufacturing and refined metals operation, supporting a Brazil-linked rare earth mine-to-magnet strategy.

Rare Earth & Lithium Deal in Brazil: St George Mining welcomed Amperex Technology (ATL) onto its register via a $2m investment, reshaping its Lithium Star JV and giving ATL exposure to St George’s Araxá rare earths and niobium project in Brazil. China-Brazil Strategic Ties: China’s FM Wang Yi met Brazil’s FM Mauro Vieira in Beijing, reaffirming deeper China-Latin America cooperation and trade alignment. Circular Economy Push: A CNI survey found 72% of Brazilians view sustainability and the circular economy positively, but 43% still hesitate to buy recycled products—mainly due to preference for new goods and doubts about durability. Fuel Price & Petrobras Moves: Brazil extended emergency measures to contain fuel prices amid volatility, while Petrobras cut diesel prices as fuel taxes were reinstated. Mining & Processing Agreement: Resouro Strategic Metals signed a mining, transport and processing deal for its Novo Mundo gold project in Mato Grosso, aiming to unlock value without diverting capital from its Tiros rare earths and titanium focus. Food & Agri Markets: Brazil’s corn competitiveness and global grain volatility stayed in focus as markets digested crop conditions and upcoming ratings.

Brazil–China Trade & Diplomacy: Foreign Minister Mauro Vieira heads to Beijing for the 5th Global Strategic Dialogue, with meetings expected with China’s vice-president and commerce minister; trade hit $170.9B in 2025, with Brazil running a $29B surplus on agricultural exports. Urban Environment & Public Services: Rio’s North Zone faces a major loss risk for Ary Barroso Park, with residents pointing to decades of government neglect as heat and infrastructure gaps worsen. Brazil–China Cultural Ties: The visit also includes events tied to the Brazil–China Cultural Year, with a stop at China’s National Museum. Food & Climate Pressure on Industry: A new report links extreme heat to supply-chain and farm losses across Brazil’s key crops and livestock, underscoring rising climate risk for agribusiness output. Energy & Industrial Policy Context: Brazil’s fuel-price controls and broader market volatility continue to shape costs for consumers and logistics-heavy sectors.