June 2, 2018 / 10:15 PM / in 8 months

Factbox: Brazil commodities firms scramble to resume ops amid trucker protests

(Reuters) - Striking truckers in Brazil have disrupted supplies and exports from one of the world’s agricultural powerhouses, but the 10-day-long protests are winding down and companies from meatpackers to soy crushers are resuming operations.

Truck owners block the BR-040 highway during a protest against high diesel prices in Luziania near Brasilia, Brazil May 23, 2018. REUTERS/Adriano Machado

Problems persist in some sectors, however, and will need time to recover. The following is the situation as of Friday:

POULTRY AND PORK: Of 167 meat-producing plants that halted operations, 163 have restarted. The rest are expected to be back up next week. Since the truckers’ strike began on May 21, meat exports have fallen by 135,000 tonnes, said industry group ABPA. At least 70 million chickens of a total flock of 1 billion have been culled as feed failed to reach farmers.

Initial ABPA estimates are 3 billion reais ($798 million) in losses. Brazil is the world’s biggest chicken exporter. It shipped 4.3 million tonnes of chicken meat in 2017, according to ABPA. Pork exports totaled around 693,000 tonnes last year.

BEEF: Brazilian beef processors have lost an estimated 40,000 tonnes of potential exports worth $170 million since the strike began, trade group ABIEC said. Brazil is the world’s top beef exporter. In 2017, exports totaled 1.53 million tonnes.

PORTS: Terminal operators at Latin America’s largest port Santos said on Friday that the arrival of trucks arriving or leaving the port was “normalizing.” Goods transported on rail have been unaffected by the dispute, but rail shipments account for only a small part of Santos’ total volume.

SUGAR: Analysts and industry groups said many mills in the main cane belt managed to get diesel supplies on Tuesday and Wednesday for machines to resume cane harvesting after some days without any field work.

At the height of the protest, hundreds of sugar mills in Brazil’s center-south region, the world’s largest sugar cane belt, were shut. Once harvesting resumes, plants can restart production of sugar and ethanol.

But mills are reporting problems shipping sugar and ethanol to ports or distribution centers because of lingering roadblocks. Brazil is the world’s largest sugar exporter and foreign shipments in 2017-18 totaled 22.5 million tonnes.

GRAINS: Soybean exporters mulled 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 grains exporters such Archer Daniels Midland Co, Louis Dreyfus Company and Cofco International.

Ships were anchored off Santos waiting for grain to arrive at the port so they could load it for export. The demurrage costs for delayed shipping would be “very large,” Agriculture Minister Blairo Maggi said this week.

ADM spokeswoman Jackie Anderson told Reuters on Wednesday that trucks are slowly starting to move in Brazil, and the company was already carrying out some shipments. “Though the recent disruption is still impacting the arrival of raw material to our local processing facilities and ports, and our ability to ship soybeans and finished products to our domestic and export customers, we expect to return to normal operations (Thursday) if the situation continues to progress,” Anderson said.

Cargill Inc is monitoring the situation closely and remains in communication with its customers, a company spokesman told Reuters on Wednesday. The global grain trader has four grain export terminals in Brazil, including one it jointly operates with Louis Dreyfus, according to Cargill’s website.

The U.S. Department of Agriculture has forecast that Brazil will export around 72 million tonnes of soybeans this year.

SOY PROCESSING: All 63 soy crushing units that ground to a halt in Brazil due to a lack of supplies were back in operation by Friday, industry group Abiove said. The group speaks on behalf of members such as top global grains merchants Bunge Inc and Cargill, who have plants in Brazil. Some could resume activities in the next few hours if road blockades are lifted and trucks can deliver beans.

COFFEE: Exports from the world’s largest producer in May are likely to total 900,000 60-kg bags fewer than expected due to the protests that hampered transport to ports, according to exporters’ association Cecafe.

The group said that the protests had caused financial losses estimated at 560 million reais ($150 million) in lost export sales and port costs. A leading coffee exporter told Reuters on Wednesday that no trucks were arriving in Santos port, so shipments could not be resumed.

Brazil is the world’s top coffee exporter. Shipments of green coffee totaled 27.3 million 60-kg bags in 2017.

OVERALL IMPACT: Losses to Brazilian farmers so far during the truckers’ work stoppage are estimated at 6.6 billion reais ($1.77 billion), said Brazil’s CNA farm lobby. It could take farmers six months to a year to recover from the impact of the protests.

Reporting by Marcelo Teixeira, Ana Mano, José Roberto Gomes and Roberto Samora; additional reporting by P.J. Huffstutter and Karl Plume in Chicago; editing by Rosalba O'Brien and G Crosse

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