Chickens culled as Brazil truckers disrupt commodity exports

Sao Paulo | Reuters — Striking truckers in Brazil have disrupted supply and exports of farm produce from one of the world’s agricultural commodity powerhouses.

Brazil is the top global exporter of soybeans, sugar, coffee and chickens. The strike over high fuel prices has paralyzed Latin America’s largest economy, emptied Brazilian roadways and left major cities running short on food, gasoline and medical supplies.

Farmers and merchants have been unable to get their supplies to key ports during the nine days of industrial action. The strike has been slow to unwind even after the government agreed to subsidize diesel prices in a bid to end protests.

The strike has had a devastating impact on livestock. Tens of millions of chickens have been killed because feed supplies have failed. If they begin to starve, chickens start eating each other, so meat packers have culled flocks quickly, according to poultry and pork processing association ABPA.

“Lack of feed leads chicken to start pecking each other and blood and cuts appear, making them confuse flesh for food. That’s when cannibalism starts,” an industry source said on condition of anonymity because the person is not authorized to speak to the media.

Some 70 million chickens had died as of Monday, ABPA said, adding that farmers were running out of space to dispose of their carcasses. Brazil is the world’s biggest chicken exporter, supplying over a third of all shipments. The Latin American country is a big supplier of chicken to Asia and the Middle East.

ABPA estimated that the country had lost 120,000 tonnes in potential exports since truckers began protesting.

Nearly 4,000 trucks of beef are sitting on roadsides throughout the country, and the meat will soon rot, said beef packer trade group Abiec. Only two of Brazil’s 109 beef processing plants continued to operate, according to Abiec, and even those plants were working at half their capacity.

Brazilian beef processors said they had lost an estimated 40,000 tonnes of potential exports worth US$170 million since the strike began.

Force majeure considered

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 grains exporters such Archer Daniels Midland and Louis Dreyfus.

No trucks had delivered soybeans to Santos, the largest port in Latin America, since the protests started on May 21, an Anec exporters group spokesperson said.

Brazil is one of the biggest suppliers to top buyer China.

Soy crushers group Abiove said on Tuesday 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.

International sugar futures notched their biggest percentage one-week rally so far this year as the strike prompted worries that millers in the world’s top sugar producer and exporter would slow crushing and be unable to get product to ports.

Cane harvesting in Brazil’s center-south, the world’s largest cane belt, has slowed because of fuel shortages.

As many as 340 mills in Brazil’s centre-south could be shut by Thursday if the strike persists, up from 220 already shut, said trade group Forum Nacional Sucroenergetico late on Monday.

Around 150 sugar mills have shut down in the state of Sao Paulo, trade group UNICA said in a statement on Monday. About 60 percent of the country’s ethanol and sugar are produced in the state.

Brazil’s top coffee exporter Cooxupe warned foreign clients last week about possible shipping delays due to the protests.

Brazil is the biggest grower and exporter of coffee, and the strike helped drive international benchmark Arabica coffee futures on ICE up two per cent to just above US$1.20/lb. last week. The strike came just ahead of Brazil’s main arabica harvest.

The Brazilian coffee industry is losing an estimated 70 million reais (C$24.3 million) per day due to the protests, trade group Abic said.

— Reporting for Reuters by Ana Mano and Jose Roberto Gomes in Sao Paulo; additional reporting by Marcy Nicholson and Chris Prentice in New York.