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Viewing cable 06BRASILIA1711, BRAZIL ESTH UPDATE, JULY/AUGUST 2006

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Reference ID Created Released Classification Origin
06BRASILIA1711 2006-08-17 15:59 2011-07-11 00:00 UNCLASSIFIED Embassy Brasilia
VZCZCXRO3487
PP RUEHAO RUEHCD RUEHGA RUEHGD RUEHGR RUEHHA RUEHHO RUEHMC RUEHNG
RUEHNL RUEHQU RUEHRD RUEHRG RUEHRS RUEHTM RUEHVC
DE RUEHBR #1711/01 2291559
ZNR UUUUU ZZH
P 171559Z AUG 06
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC PRIORITY 6399
INFO RUEHRI/AMCONSUL RIO DE JANEIRO 2699
RUEHSO/AMCONSUL SAO PAULO 7769
RUEHRG/AMCONSUL RECIFE 5307
RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
UNCLAS SECTION 01 OF 02 BRASILIA 001711 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: SENV TNGD KSCA EAGR BR
SUBJECT: BRAZIL ESTH UPDATE, JULY/AUGUST 2006 
 
BRASILIA 00001711  001.2 OF 002 
 
 
NEW BIODIESEL FACTORY 
--------------------- 
1.  American Company Archer Daniels Midland (ADM) has announced 
construction of a biodiesel plant in the state of Mato Grosso.  ADM 
will invest a total of USD 30 million in the refinery, which will be 
the biggest biodiesel-producing plant in the world with a yearly 
production capacity of 180 thousand tons of the fuel.  The company 
is already the leading biodiesel producer in Europe and will use 
soybean oil as its main input in Brazil.  The new refinery will be 
totally integrated with the company's soybean compressing company in 
Mato Grosso by the first semester of 2007, and will be ADM's first 
biodiesel investment in Brazil.  Their soybean compressing operation 
currently produces 2 million tons of soy oil a year. 
 
BRAZIL LIKELY TO MEET BIODIESEL TARGET EARLY 
-------------------------------------------- 
2.  President Lula recently announced the possibility of attaining 
the 2% biodiesel mix obligation target early, following an 
announcement the Brazilian Association of Biodiesel Industries 
(ABIOdiesel) was made.  According to Brazilian law, by 2008 all 
conventional diesel sold in the country must incorporate a 2% 
mixture of biodiesel and a 5% mix by 2013.  At present, this 
addition is optional, although approximately 2000 gas stations are 
already selling the product.  According to Energy and Mines 
Minister, Silas Rondeau, seven biodiesel companies are operating in 
Brazil, while another 14 await GoB approval and 16 others are under 
construction.  Each company has an approximate 123 million 
liter-per-year production capacity and over 205 thousand small 
farmers are part of the country's national biodiesel program.  Since 
the 2008 production goal of 840 million liters has already been 
reached, the program's targets are likely to be reviewed. 
 
NATURAL GAS INVESTMENT BOOST 
---------------------------- 
3.  Petrobras' Energy and Gas Director, Ildo Sauer, announced a USD 
22.1 billion investment for the company's gas sector through 2011. 
The company itself will invest USD 17.6 billion, while its partners 
will invest another USD 4.5 billion.  The state company expects to 
raise its gas production by 17% a year, expanding from 41 million 
cubic meters a day to an estimated 70 million.  Sauer said that this 
increased investment was the solution found to satisfy growing 
national demand, especially after Bolivia's recent gas 
nationalization. 
 
ETHANOL EXPORT RISE 
------------------- 
4.  Brazil registered a record 568 million liters ethanol exports in 
July, more than double the 268.2 million liters shipped abroad 
during the same month last year.  Despite the 54 cents-per-gallon 
import tariff, U.S demand accounted for 84% of the total volume, 
according to data from the Ministry of Agriculture.  Ethanol 
revenues for the month were USD 289 million, nearly four times as 
much as the USD 75.5 million registered in the same period a year 
ago.  Apart from the U.S, the European Union and Venezuela were also 
key buyers of Brazilian ethanol. 
 
NEW DIABETES TECHNIQUE TESTING 
------------------------------ 
5.  Two medical centers in Sao Paulo are testing a new treatment for 
Type 2, Diabetes.  The new technique is being tested in patients 
with a Body Mass Index (BMI) lower than 35, who undergo an 
intestinal surgery that stimulates the hormone responsible for 
insulin production.  Even though testing is still in its initial 
phases, the results for the first four patients have been promising. 
 One of them no longer needs to take insulin shots, while the other 
three have reduced their dosage by approximately 33%.  Approval for 
additional testing is expected in the coming months. 
 
MANAGED LOGGING SPARES BIODIVERSITY 
----------------------------------- 
6.  Low impact, managed logging has little effect on biodiversity 
according to a recent study from the Environmental Research 
Institute of the Amazon (IPAM).  At an average extraction rate of 19 
cubic meters per hectare, a small number (3-15%) of original species 
are not present in the area anymore.  However, data show that, on 
average, the number of birds and invertebrates rose slightly and 
mammal species remained the same.  IPAM's research coordinator, 
Claudia Azevedo-Ramos, said that the long-term results still need 
more detailed analysis but the economic viability of this action 
exists.  Ramos was quoted as saying, "the initial cost of cutting 
wood is higher, but after that its exploitation is more precise". 
 
 
WORMS DETECTING CONTAMINATED SOIL 
--------------------------------- 
7.  Worms are being used to test the contamination level of soils in 
areas where mining activities and petroleum exploitation have taken 
place.  Researchers from the Center for Mining Technology Laboratory 
(Cetem), part of the Ministry of Science and Technology (MCT), 
studied three soil samples and compared worm mortality in them to 
 
BRASILIA 00001711  002.2 OF 002 
 
 
samples of uncontaminated soil.  The number of deaths compared among 
the samples determines the level of contamination from the different 
activities.  Cetem is also testing other insects to be used in river 
contamination analysis. 
 
AVIAN INFLUENZA EDUCATIONAL CAMPAIGN 
------------------------------------ 
8.  For the first time in ten years, the GoB will publicly address 
the issue of avian influenza.  The ad campaign targets the one 
million inhabitants that live in nearby regions of national parks 
and other wild bird habitat locations.  The GoB's concern is due to 
the beginning of the migratory season.  Even though most birds 
migrate to Brazil from North America, where no avian influenza cases 
have been recorded, studies show the possibility of a rare direct 
migration from Asia, Africa and Europe.  Due to these possibilities, 
the Ministry of Health has decided to start an informational 
campaign explaining what to do in case of an AI outbreak in the 
country.  The campaign will use folders, pamphlets and radio to 
disseminate educational information. 
 
SOBEL