Mosaic, which made the deal to improve its access to Brazil’s vast agricultural markets, will pay $1.25 billion in cash and $1.25 billion in newly issued shares for the unit.

The deal would give Mosaic, which operates three Canadian potash mine sites in Saskatchewan, control of Vale’s potash mining project at Kronau, Sask., about 30 km southeast of Regina.

Vale will receive an 11 per cent stake in Mosaic, bigger than those held by investment companies such as Vanguard, Franklin Advisers and BlackRock Inc.

After the deal closes, expected by late 2017, Vale will have the right to name two members to Mosaic’s board. It will have to keep the stake for at least two years.

Mosaic shares were down six per cent at $27.76 and Vale’s preferred shares were off 6.3 per cent at 22.79 reais (C$9.05) at the close of trading on Monday. Vale’s shares have risen 127 per cent this year, as iron ore prices recovered, but Mosaic’s shares are up a mere one per cent.

Michael Underhill, chief investment officer of Capital Innovations LLC, a Mosaic shareholder, said he thought the price might have been too high for the U.S. company.

“We believe the price paid and the leverage involved could prove too high/risky, though we understand the ‘once-in-a-lifetime opportunity’ to acquire large assets in the fastest growing agriculture/fertilizer market,” he said.

Excessive global supply and attendant slumping prices are putting pressure on fertilizer makers and leading to consolidations such as a proposed merger between PotashCorp and Agrium.

Brazil is a major producer of fertilizer-intensive crops corn and sugar cane, and is a large importer of such crop nutrients as phosphate, making it a prized market.

“This deal enhances Mosaic’s position as the leading phosphate producer in the world,” Mosaic CEO Joc O’Rourke told investors on a call.

“We’re getting first rate assets at a valuation reflecting the downside of the cycle and we will have the ability to benefit from a strongly growing Brazilian agricultural market as business conditions improve,” he added.

In a video on Vale’s website, CEO Murilo Ferreira said the company never had the opportunity to become a world leader in fertilizers as it has with iron ore and nickel. “So we opted for an association with a highly competitive international company,” he said.

Mosaic said it expects the deal to add to earnings per share by 2018. Brazilian unit will become Mosaic’s largest by trading volume, surpassing North America, Floris Bielders, the president of Mosaic’s Brazilian unit, told Reuters, adding that the North Americas unit will still lead in production.

Vale said that it will use the proceeds to reduce net debt, which stands at nearly $26 billion, according to the company’s latest quarterly results.

Vale, which posted a record $12.1 billion loss last year, is selling assets after years of low iron ore prices that have slammed its balance sheet.

It will retain control of its nitrogen and phosphate fertilizer assets in Cubatao, a city in southeast Brazil, but said it expects to sell them in 2017.

Sources with knowledge of the deal told Reuters in October that Vale was also in talks to sell some of its fertilizer assets to Norway’s Yara International ASA. In a note to clients on Monday, Credit Suisse analysts estimated the remaining fertilizers assets may be worth $625 million.

In addition to Vale’s phosphate assets in Brazil, Mosaic will acquire Vale’s stake in Peru’s Bayovar mine as well as the Kronau project. Mosaic has yet to decide whether to include Vale’s Rio Colorado potash project in Argentina in the acquisition.

Plymouth, Minnesota-based Mosaic may pay an additional $260 million depending on future earnings of the fertilizer unit, the two companies said.

Analysts at Banco BTG Pactual estimate Mosaic is paying 8.6 times the fertilizer division’s earnings before interest, taxes, depreciation and amortization (EBITDA), a gauge of operational profit, calling it an attractive multiple.

On June 17, Reuters was first to report on the talks between Mosaic and Vale.

— Reporting for Reuters by Stephen Eisenhammer and Gustavo Bonato. Additional reporting for Reuters by Tatiana Bautzer and Bruno Federowski in Sao Paulo and Rod Nickel in Winnipeg.

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Highway police on Thursday evening estimated that protesters had blocked roads at 17 points across the region, mainly affecting the movement of soybeans and corn. Those crops are in the final weeks of the main summer harvest.

In early March, truckers had agreed to end a strike that choked off deliveries of food, fuel, exports and industry supplies for more than two weeks. At that time, the number of blockages reached more than 100 points along highways.

Truckers entered talks soon after to try to secure a national scale for freight rates and lower diesel prices. But transport and logistics companies have resisted accepting set rates for freight in negotiations with truckers. The government said it would not lower diesel prices.

Highway operator Rota do Oeste said striking truckers had blocked the movement of cargo on three roads in the main grain state of Mato Grosso, where the company is based, causing mile-long lines of trucks on the sides of roads.

Passenger cars and critical services such as police, fire and ambulances are moving normally through the blockades, with striking truckers typically parked along the shoulder of roads near towns, Rota do Oeste said.

Trucks carrying dry bulk such as soybeans, corn, fertilizer and other non-perishables risk vandalism to their vehicles if they attempt to drive past protest lines.

Across Brazil’s center-south agricultural region, roads in other farm states including Parana and Rio Grande do Sul were also being blocked by protesting truckers.

Representatives from Brazil’s main southern ports said the delivery and loading of grains and dry bulk commodities were not yet affected by the strike and they did not expect an impact unless the strike carried on for several days.

Traders and futures markets have kept cautious watch on negotiations with the truckers, assessing the risk of new disruptions to supplies of sugar, coffee, soybeans, beef and orange juice. Brazil is one of the world’s largest exporters of agricultural commodities.

— Gustavo Bonato reports on agriculture and agribusiness for Reuters from Sao Paulo. Writing and additional reporting for Reuters by Reese Ewing.

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Authorities have agreed to restrict truck access to some terminals at the port at least through Wednesday while flames are extinguished.

Brazil, the world’s No. 2 soybean producer, is finishing harvesting a record crop and Santos is responsible for moving one third of the country’s exports of the commodity.

Trucks heading to the port through the city of Santos on the Anchieta Highway were prevented from entering at midnight on Monday. Trucks could still proceed to Guaruja, a city on the opposite side of the ship channel.

“(Grain) stocks at the port are no longer supporting shipments on the (Santos) margin,” Daniel Amaral, economist at Brazilian vegetable oil association Abiove, told Reuters. Abiove represents the country’s largest soy traders.

Authorities plan to keep the entrance closed to most trucks until Friday, although they are revising that decision every 12 hours.

Amaral said Abiove members are concerned they will have to pay fines for delayed shipments. If trucks are restricted until Friday, shipments would only return to normal on Sunday, he said.

Port authority planning director Luis Montenegro said that though there will be some impact on grains exports, ships will only be delayed by a day or two, which he said is a period often covered by delivery contracts.

Some 45 per cent of the grain shipments to the restricted area usually come by truck, while 55 per cent arrive by train, he said.

By Tuesday morning two of six fuel tanks at the storage facility were on fire, the facility’s operator, Ultracargo, a unit of Brazilian chemical and fuel-distribution company Grupo Ultra, said in a statement.

Six tanks with a combined capacity of 34,000 cubic metres (214,000 barrels) of ethanol and gasoline were damaged after the fire first broke out on Thursday, Ultracargo said.

Shipping agents Williams reported that the state-run oil company Petrobras has informed companies that its supply barges are now authorized by the Harbor Master to resume bunker fuel deliveries, which are due to restart overnight.

The harbour master had banned ships from restocking bunker-fuel supplies after the fire broke out last week.

The Santos side of the port is also home to sugar terminals operated by Copersucar and Cosan SA’s Rumo Logistica. Officials at both companies said sugar was still arriving at the terminals by train, minimizing the impact on exports.

— Reporting for Reuters by Gustavo Bonato and Caroline Stauffer; additional reporting for Reuters by Jeb Blount and Priscila Jordao.

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There were seven protests over rising freight costs affecting federal highways, down from 18 on Monday and well below peaks of more than 100 a week ago, police said. May soybean future prices fell 0.76 per cent as a result.

By mid-afternoon 500 trucks had arrive at Brazil’s No. 2 soy exporting port of Paranagua where recent roadblocks depleted soy stocks. That was enough to guarantee exports at least through Thursday rather than Wednesday, a spokesman said.

In addition to leaving supermarkets with empty shelves and slowing soybean harvesting, the strike has cost Brazil’s poultry and pork industries about C$300 million, industry association ABPA said. Some slaughter plants remained closed due to roadblocks, it added.

Access to the country’s main poultry exporting port of Itajai in Santa Catarina state has also been blocked since Friday, according to Fabio Rosa, a manager at a private warehouse near the port.

Warehouses such as his are full, holding some 300 refrigerated containers, he said.

“We’ve never had this many containers. The big companies, JBS, BRF are all waiting to access the port and load ships,” Rosa said.

JBS SA said on Monday it had obtained a court order to have police escort its trucks past protests, but Rosa said that wasn’t helping trucks access the port.

In the state of Rio Grande do Sul, where protests have turned violent, police arrested 20 people on Monday and two protests remained on Tuesday, police said.

Seventy per cent of operations at the Rio Grande port were affected by the strike, a spokesman said. The port will finish an analysis of grains stocks by Thursday and is not at risk of running out before then, he added.

The BR-163 highway, a key soybean corridor in Mato Grosso, was completely clear for the first time since protests ignited on Feb. 17, highway operator Rota do Oeste said on Tuesday.

Truckers in the centre-west grain state said they had opened roads temporarily as protests focus on the nation’s capital amid talks with the government.

“It’s a truce due to the meeting this Tuesday in Brasilia,” said Mato Grosso trucker Junior Boscoli on the phone from the capital, where drivers around the country are gathering.

— Reporting for Reuters by Caroline Stauffer and Gustavo Bonato; additional reporting by Marcelo Teixeira.

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A group of transport companies and independent truckers are blocking the flow of goods on the main highway and other major roads in Mato Grosso, a centre-west state that is Brazil’s top producer of soybeans and a major source of corn and livestock.

“Everything is stopped,” a silo manager at a multinational grain trader in the state said on condition of anonymity. “In three to four days, it will be a problem for industry and the ports.”

He said trucks were allowed to go to local silos to unload but not to crushers or ports.

The protest began on Wednesday as truckers parked on the shoulders of highway BR 163 in two of the state’s towns but quickly spread to include the towns of Nova Mutum, Lucas do Rio Verde, Sorriso and Sinop, said Rota do Oeste, the road operator for the highway in Mato Grosso.

Until Friday, truckers had limited the flow of goods only from 8 a.m. local time to 11 a.m. and from 1 p.m. to 7 p.m. Truckers, however, have escalated their protest and vowed to continue the blockade until the state government demonstrates a willingness to reduce the diesel taxes.

“It is now for an indefinite period,” said Gilson Pelicioni, a protest leader who owns a trucking company and is a councilman in Lucas do Rio Verde.

Truckers and transport companies are scheduled to talk with officials of the state government later on Friday.

Meanwhile, Rota do Oeste reported that lines of trucks are forming on the sides of the roads affected by the blockade. Truckers are allowing cars, public transport and other non-commodity-related vehicles to travel without obstruction.

Brazil’s grain producers association, Aprosoja, said late on Thursday that the truckers’ demands were valid but stressed the importance of a functioning transport infrastructure during the peak of a record grain harvest.

“We need farms to be supplied with diesel (to fuel harvesters) and transport of soybeans to silos to be guaranteed,” Aprosoja President Ricardo Tomczyk said in a note.

— Gustavo Bonato reports on agribusiness for Reuters from Sao Paulo, Brazil. Writing for Reuters by Reese Ewing.

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Soybean planting in Brazil’s leading agricultural states is only allowed after Sept. 15, following a period of three months in which the land must be left fallow to avoid the spread of disease in the tropical soil.

Many farmers, aiming for a quick harvest that would allow them to plant a second crop of corn under the best conditions, hope to begin sowing seed in the first days of the season.

But in the center-west grain belt the weather is not likely to accommodate that goal. Steady rain is not forecast until mid-October, in line with the region’s historical climate patterns but later than many farmers had hoped.

“It’s going to be risky to plant in the dry earth this year, hoping for the rain to come,” said meteorologist Marco Antonio dos Santos of local meteorology firm Somar. “We don’t see regular rain immediately after Sept. 15.”

Nery Ribas, technical director at Mato Grosso state’s Aprosoja farmer’s association, agreed.

“The risk of planting before regular rain is too high. Only a few will take the chance,” he said. “We cannot afford to waste the initial investment by having to replant fields.”

Waiting another month to plant soybeans would not affect the size of the soy crop, but it would delay the planting of a second crop of corn or cotton, reducing farmer’s potential profits.

Indeed, many private consultancies published their estimates for Brazil’s 2014-15 soybean crop this week and not a single one pegged production below 90 million tonnes, which would beat the past season’s record of 85.65 million.

Another reason farmers are not likely to force early planting is the rising cost of soybean seeds, fertilizers and pesticides: up 15 per cent from a year ago, according to the Mato Grosso state farm institute Imea. The price of seeds alone has climbed 40 per cent since mid-2013.

Meanwhile, benchmark soybean prices have fallen 33 per cent on the Chicago Board of Trade (CBOT) in the past 12 months.

“Costs are fixed. The problem now is the prices for the soybeans. Our message to farmers is caution, caution, caution,” Ribas said.

Emerson Nunes, an agronomist in charge of monitoring grain crops at Cocamar, one of the largest co-operatives in No. 2 soy state Parana, said farmers are worried about the profit outlook. The U.S., Brazil’s biggest competitor in the soybean market, is getting ready to harvest a record crop, pushing down international prices.

“Some may use seeds saved from last season or avoid buying agrochemicals in advance,” Nunes said.

The weather forecast for the season’s first weeks is not the one farmers wished for, but the outlook for the entire period indicates a record crop.

The El Nino weather phenomenon could hit Brazil with mild intensity in the coming months, boosting much desired rainfall during the growing period, forecasters said.

— Gustavo Bonato reports for Reuters from Sao Paulo, Brazil.

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Soren Schroder was in Brazil for Friday’s inauguration of Bunge’s new terminal in Barcarena on Brazil’s northern coast. The terminal, in the state of Para, cost 700 million reais (US$314 million) to build and has a capacity of four million tonnes.

“Margins in China are bad for everyone,” Schroder said at a dinner late Thursday. But he said the problem is short-term.

Schroder said the long-term trend is for China’s soybean demand to increase, though he did not explain why he sees improvement for Chinese crushers in two or three months.

Chinese importers have canceled at least 500,000 tonnes of soybeans purchased from Brazil and the United States in recent weeks, according to Asian market sources, as buyers have struggled to get credit amid losses in processing beans.

Weaker soy demand from China puts one of Brazil’s main sources of trade income at risk at a time the South American country’s economy is slowing. Brazil, the world’s top soybean exporter, sends the vast majority of its soy shipments to China.

Raul Padilla, who will take charge of Bunge’s Brazilian operations next week, said China had not canceled any Brazilian soybean purchases from the company.

Bunge Brazil is not seeing any losses from the problem with China, he said.

Bunge plans to ship its first soy cargo from Barcarena on Saturday, launching a short cut that will make Brazilian soy more competitive by relieving congestion in overcrowded ports in the southeast.

Some 10 companies are expected to start exporting from the Barcarena region in the coming years. Outgoing Brazil CEO Pedro Parente said shipping soy by road and river barge north from Mato Grosso in central Brazil through the Amazon to Para state’s coast would help Bunge gain market share in Brazil.

U.S.-based Bunge is already the top agricultural exporter in Brazil, the world’s top sugar and coffee producer. With the Barcarena terminal, Bunge will have capacity to export 35 million tonnes of grains from Brazil per year.

Potential mill sale

Parente, who until recently was also chairman of the board of Unica, Brazil’s main sugar and ethanol lobby, said Bunge is considering the sale of its cane milling assets as one option for resolving the poor returns from its mills in past years.

“The (cane) division has its own cash flow but it has not produced returns on its capital,” said Parente, who was given the task at Unica of being the sugar and ethanol industry’s lead negotiator with the government.

When asked directly by Reuters about the sale of Bunge’s milling assets, Parente responded: “We’re in the middle of the process, when there is something relevant, we’ll announced it.”

Most of Brazil’s cane industry has been operating in the red over the past several quarters due to the weak price of sugar and government controls on fuel prices. Mills have been unable to generate sufficient margins to cover operating and financing costs.

Bunge operates eight mills in Brazil and is one of the country’s leading producers of sugar and ethanol, crushing 20 million tonnes of cane a year.

“We have an obligation (to shareholders) to cover the cost of capital,” he said.

Bunge first announced it may sell its mills in November, only half a decade after making major investments into the sugar and ethanol sector. Bunge estimated the value of its milling assets at US$2 billion to $2.5 billion in February.

— Gustavo Bonato reports on agribusiness for Reuters from Sao Paulo, Brazil. Writing by Caroline Stauffer and Reese Ewing.

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The short-lived work stoppage provided a glimpse of what could turn out to be a tense harvest for Brazil, one of the world’s biggest exporters of agricultural crops. With a record soy harvest on tap and brewing labour disputes at ports, doubts are mounting about Brazil’s ability to meet delivery contracts and quell growing unease in global commodity markets.

The strike halted 17 of the 26 ships berthed to load and unload in Brazil’s main port of Santos and slowed the flow of soy, corn, sugar, coffee and containers at other big ports, including Paranagua, port authorities said.

Even before stevedores walked off the job, commodities brokers had reported lines of trucks waiting to unload soy shipments and more than 100 ships either waiting or arriving to load bulk commodities for international markets.

Expectations of delays at Brazil’s ports caused top buyer China to cancel at least two soy cargoes ordered from Brazil last week and buy from the United States instead.

A union plan for an open-ended strike in mid-March still looms if talks with the government break down.

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. 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 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 make it the world’s No. 1 exporter of those grains, surpassing the United States for the first time.

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.

Brazilian 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 “OGMO” and might bring in labour from abroad.

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.

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