UPDATE 1-Brazil port strike called off, flexible on reform -union
* Gov't calms port workers concerns over jobs, benefits losses
* Gov't wants port reforms to attract investment (Adds union and government positions; background on ports)
SAO PAULO, March 21 (Reuters) - Brazilian dock workers called off a national port strike set for next week and said they are willing to relax rules that allow unions to control labor assignments at terminals, following talks with the government over reform of the country's ports, union leaders said on Thursday.
Progress in talks between the unions and government will help relieve some pressure building on the global soy and sugar markets, which have been fixating on concerns that Brazil's underdeveloped port infrastructure might grind to a hault under the weight of record crops this season.
Port workers have interrupted the flow of commodities such as soy, corn, coffee, sugar and meats through Brazilian ports over the past few months with occasional six- to 24-hour strikes, hoping to pressure the government to negotiate its reforms.
The timing is delicate. Brazil is in the peak of its grain export season and about to pick up its sugar exports in the coming months. Port worker unions were planning a new strike on Monday but called it off after progress in talks with government negotiators.
Dock workers fear the government's proposed overhaul of Brazil's 1993 port regulations would lead to a loss in jobs and benefits because private operators would not have to hire through a public, centralized agency, known as "OGMO."
The government says the planned changes for ports are critical for attracting billions of dollars in private investment. Brazil could surpass the United States in soybean production exports soon, but lacks the infrastructure to ensure smooth delivery.
Even without strikes, top buyers have paid premiums for scarce U.S. soybeans because they are afraid of delays in Brazil, due to growing lines of trucks hauling grain and sugar. (Reporting by Ana Flor; Writing by Reese Ewing; Editing by Gerald E. McCormick and Bob Burgdorfer)
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