Dock worker strike exposes weak link for Brazilian export powerhouse

The government wants to privatize 
158 ports to attract private investment, 
but workers fear a loss of jobs

Reuters / Dock workers shut down the movement of global commodities through Brazilian ports early Feb. 22 during a six-hour strike to protest the government’s plan to overhaul regulations and put more than 150 terminals in the hands of the private sector.

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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