May 9, 2006

 

Brazilian farmers expand protest; soy stocks down

 

 

Brazilian farmers in the centre-west soy belt began their third week of protests against low local commodity prices, forcing soy crushers to use up most of their stocks and effectively closing two states to all commercial agribusiness traffic.

 

On Friday (May 5), the centre-western state of Goias entered the fray, blocking commercial transit of soy and other farm commodities along route BR364 and BR060 in the south-western part of the state where soy is concentrated. The routes take soy from Mato Grosso, the no. 1 soy producer in Brazil, and Mato Grosso do Sul into smaller roads leading to Sao Paulo.

 

"Rail is working normally and most of the state's soy is shipped by rail, so that's the only saving grace right now," said Guilherme Castro, a director at the Agricultural Federation of Goias.

 

Mato Grosso and Mato Grosso do Sul, its southern neighbour, are essentially closed for business at this time.

 

"You cannot deliver anything, and you cannot ship anything. It's reaching its limit at this point," said a soy buyer at a soy crusher in Mato Grosso do Sul.

 

"Any truck that takes soy out of this state to Parana is going to be blocked. There is no sense in even trying to quote freight prices anymore," said Celso Saltarelli, president of a farm union in Mato Grosso do Sul. Saltarelli reconfirmed that at least four silos in the state remain closed. They were closed two weeks ago.

 

Some soy crushers and exporters like Guilherme Correia of Coimex have said that the protest has had little impact because there are sufficient stocks at the ports and the centre-west soy crop has already been harvested and in most cases sold. But soy crushers in Mato Grosso are running out of stocks to make soymeal and soyoil. Meal and oil they have already produced cannot be shipped.

 

"We started off this protest with 25 million tonnes of soybeans in storage, and now we are down to 5,000 tonnes," said Thiago Simon, a soy buyer at Sperafico Agroindustrial in Mato Grosso.

 

"There's no sense shipping out of Sperafico because it's going to get roadblocked. Exports for us are totally stopped," Simon said, suspecting the protest could temporarily close Sperafico's unit in the state.

 

Soy volume at Paranagua port in Parana state, the no. 2 shipping port, rose to 234,750 tonnes Monday from 188,200 tonnes on May 4, according to Transcar Maritime Shipping Agency in Paranagua.

 

Eight international cargo ships are lined up to receive Brazilian soy at Paranagua Monday, with one loading for China, compared with 11 lined up on May 3, according to Joanna Matos, a booking agent at Transcar.

 

Transcar in Santos said they did not have data on total soy volume in stock because soy is stored in separate private terminals, but added that any roadblock of soy shipments out of the centre west could have an effect on deliveries this week.