Market News & Headlines >> Truckers Strike Hammers Brazil Agriculture

A truck drivers’ protest over high diesel fuel prices continued in Brazil on Tuesday for a ninth day despite government concessions, wreaking havoc across that country’s economy and causing big losses in its agricultural sector. 

Brazil's CNA farm lobby said on Tuesday that producers had lost 6.6 billion reais ($1.76 billion) so far during the protest. CNA said in a statement that its estimate reflected only primary production losses and did not take into consideration losses for agriculture processors, industries and makers of inputs. CNA said it estimates it will take producers six months to a year to recover from the protest, which has paralyzed vast swaths of Brazil's economy. 

Soybean exporters are considering declaring force majeure on shipments, a contractual clause that releases them from obligations because of events beyond their control, according to ANEC, a trade group representing exporters such as ADM and Louis Dreyfus Co. No trucks had delivered soybeans to Santos, the largest port in Latin America, since the protests started on May 21, an ANEC spokesperson said.

Soy crushers group ABIOVE said on Tuesday that all soy crushing units had ground to a halt in Brazil because of lack of supplies. "There are reports that road blockades have been lifted in some places but we don't know if the units started receiving raw materials to resume crushing," an ABIOVE representative told Reuters on Tuesday.

Brazil’s government on Sunday announced measures to cut diesel fuel prices by 0.46 reais per liter (about 49 cents per gallon) for 60 days. The government will eliminate one of the taxes on fuel to achieve the reduction and the total price cut will amount to almost 20%. In addition, the government agreed to exempt truckers from tolls when they are traveling empty. 

Brazilian meat group ABPA said on Monday that the country had lost 120,000 metric tons of potential chicken and pork exports since truckers began their strike. 

The strike has had a devastating impact on livestock, Reuters reports. Tens of millions of chickens have been killed because producers have run out of feed supplies. If they begin to starve, chickens start eating each other, so meat packers have culled flocks quickly, according to ABPA. Some 70 million chickens had died as of Monday, ABPA said, adding that farmers were running out of space to dispose of their carcasses. 

Nearly 4,000 trucks of beef were sitting on roadsides throughout the country, and the meat will soon rot, according to the Brazilian beef packer trade group ABIEC. Only two of Brazil's 109 beef processing plants continued to operate, according to the group, and even those plants were working at half their capacity. ABIEC estimated in a statement that 40,000 metric tons of potential beef exports worth $170 million have been lost due to the strike.