Brazilian truckers threaten grains exports as fuel protests widen

by Reuters
Tuesday, 22 May 2018 16:18 GMT

* Petrobras cuts diesel prices, shares fall

* Finance minister, Petrobras CEO deny interference

* Protests affect major ports, threaten soy, meat deliveries (Adds details of protests, comments from finance minister and Petrobras CEO)

SAO PAULO/BRASÍLIA, May 22 (Reuters) - Truck drivers partially blocked roads and ports across Brazil on Tuesday in a second straight day of protests against a steep rise in diesel prices, threatening to slow delivery of grains and other goods to domestic and export markets.

Thousands of trucks were parked to obstruct major roads as the protests spread to affect access to the country's two main export ports, Santos and Paranaguá. Brazil's government called a second meeting to discuss the issue.

Brazil is a key global supplier of grains, meats, coffee, sugar, oil and iron ore — most of which reach ports by road. Soy futures rose in Chicago on Monday due to the risk the strike might interrupt shipments of Brazil's record soybean harvest.

The protests have put pressure on the government to provide relief from rising fuel costs, which could mean that it either backslides on efforts to close Brazil's fiscal deficit or interferes in the state-controlled oil company's pricing policy.

A small diesel price cut announced on Tuesday by Brazil's state oil firm Petroleo Brasileiro SA, or Petrobras, did nothing to reduce protests, according to police and a group organizing the truckers.

The price reduction was part of a policy of near-daily adjustments to track global markets since last July, which has allowed the company to sell fuel at a profit after doing so at a loss for years.

The new policy has been key to the operational turnaround at Petrobras, lifting its share price to an eight-year high. However, fuel prices have surged nearly 50 percent at Brazilian refineries in less than a year.

Shares of Petrobras fell more than 2 percent in Sao Paulo on Tuesday on concerns that political pressure had led to the latest price cut, eroding the autonomy of the company's pricing policy.

That was denied by Petrobras Chief Executive Pedro Parente, who spoke to reporters after an early meeting in the capital Brasília on Tuesday with Energy Minister Wellington Moreira Franco and Finance Minister Eduardo Guardia.

"At no point did the government request that Petrobras change its (fuel) pricing policy," said Guardia, supporting Parente's denial.


Abcam, the group organizing the protests, said truckers were striking in 15 states, including key agricultural, industrial and transportation hubs, and more were expected to take part in the blockades on Tuesday than on Monday. Some 200,000 drivers took part in Monday's action, it said.

A toll road operator in Brazil's largest grains-producing state, Mato Grosso, said blockades had expanded overnight to four points along the key BR-163 highway, which carries grains to northern and southern ports for export. An official with road operator Rota do Oeste said protesters would only let passenger vehicles, ambulances and live or perishable cargo get through.

At the port in Santos, Latin America's largest, truck drivers blocked traffic near the terminals, said Codesp, the state-run firm that administers the area.

ABPA, an association representing pork and poultry processors, said the protests are affecting transportation of feed and animals, forcing some plants to reduce shifts. (Reporting by Ana Mano, José Roberto Gomes, Gram Slattery and Marcelo Teixeira in São Paulo; Mateus Maia in Brasília; Editing by Brad Haynes and Paul Simao)

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