* Stoppages lasted 6 hours at grain ports Santos, Paranagua
* Unions back at work, agree to call off Tuesday strike
* Protests target government drive to privatize ports
By Gustavo Bonato and Roberto Samora
SANTOS, Brazil, Feb 22 Dock workers returned to
work at ports across Brazil on Friday after they disrupted the
movement of global commodities with a six-hour strike in protest
of the government's plan to overhaul regulations and privatize
hundreds of terminals.
The short-lived stoppage provided a glimpse of what could be
a tense harvest for Brazil, one of the world's biggest
commodities exporters, if unions do not reach a deal with the
government and call off an open-ended strike set for mid-March.
Until then, ports should operate normally as both parties
agreed to a negotiation period that runs through March 15.
Workers decided to call off a second six-hour stoppage planned
"We are tense, the companies are strong and the workers are
weak in these negotiations," said Geraldo Ventura, a dock-side
worker since 1974, as he waited to sign up for an afternoon
shift at Brazil's Santos port.
Shipping lineups soared to more than 50 in Santos, which
accounts for 25 percent of international trade in Brazil, and 90
in Paranagua, according to cereal exporters' association Anec.
"The paralyzation caused irreparable damage to the national
logistics chain," Jose dos Santos Martins, executive director of
the country's national association of terminal operators, known
With a record soybean harvest and strong corn and sugar
crops putting pressure on Brazil's antiquated roads and ports
during a brewing labor dispute, doubts are mounting about the
country's ability to meet delivery contracts.
Even before some 30,000 stevedores walked off the job at 36
ports early on Friday, expectations of delays caused top buyer
China to cancel at least two soybean cargoes ordered from Brazil
and buy from the United States instead.
"With the additional amount that we need to export this
year, we just can't have any problems," said Anec's General
Director Sérgio Mendes, referring to a soybean crop that is
likely to be 25 percent bigger than last season.
Friday's strike halted 16 of the 26 ships berthed to load
and unload at Santos Port and slowed the flow of soy, corn,
sugar, coffee and containers at other big ports, including
Paranagua, port authorities said.
Bulk grain loading, which is done via conveyer built and
requires little labor, is normally uninterrupted at Santos, but
the strike shut down most bulk cargo loading of grains.
Loading at the Copersucar and Cosan terminals,
two of the world's largest exporters of sugar, was also
temporarily stopped, Reuters reporters at Santos said.
Chicago grains markets rose early on Friday on news of the
disruption at Brazilian ports, though they fell back later in
the day after Ports Minister José Leonidas Cristino reached an
agreement with union leaders in Brasilia to negotiate.
The government agreed to wave potential fines on unions that
participated in the strike, which was not deemed legal.
"The strike was fundamental for us to obtain this
agreement," said Sergio Nobre from the CUT umbrella union which
oversees representation of several economic sectors, speaking to
reporters at the Presidential Palace in Brasilia.
Minister Cristino, however, said the government would not
allow changes in the "essence of the project," referring to
proposed regulations that are being debated in Congress.
AFRAID OF PRIVATIZATION
The dock workers fear a government drive to privatize some
158 terminals starting later this year will lead to a loss of
jobs and benefits because private operators would not have to
hire through the centralized agency, known as "OGMO."
The Brazilian government says the planned changes for ports
are needed to boost competitiveness as it seeks to attract
billions of dollars in private investment to expand capacity to
cope with burgeoning commodity exports.
But the government's decision to launch a major push for
port reform that was likely to rile some of the country's
biggest unions could not have come at a more delicate moment for
Brazil or global commodities markets.
Brazil's grain belt is struggling to ship record corn and
soybean crops that are likely to soon make it the world's No. 1
exporter of those grains, surpassing the United States.
At the same time, global grain stores are at record lows due
to severe droughts that hit North and South American output in
the previous season, raising concerns over food inflation.
The local farm sector has managed over the years to dominate
much of the world's agricultural commodities markets by
leveraging tropical sun, savanna and rains, and was a bright
spot for Brazil's slowing economy last year.
But insufficient investments in local roads, railways and
ports to keep up with the rapid expansion in the country's
farming potential has raised the costs and risks of doing
business with Brazil.
The decision to reform the Ports Law at the start of
Brazil's main commodities export season may raise doubts among
potential infrastructure investors, who Finance Minister Guido
Mantega and other local officials will be courting during a road
show in New York next week.
Despite the strong demand for Brazil's crops and the
pressure to export them swiftly, workers in a steamy waiting
room in Santos said they feared for their job security if the
ports left the government's hands.
"Today there's a lot of work, but if there weren't ships in
this public port here, there might not be," said Marco Aurelio
Nascimento, who was returning to his job after the walkout.