May 11, 2006

 

Brazilian farmers' protest continues; Paranagua's soy stocks down

 

 

Stocks of soybeans stored in public warehouses owned by the Paranagua Port in Parana, Brazil, dipped Wednesday (May 10) for the first time in a week to 178,620 tonnes compared with 228,860 tonnes on Tuesday as the Brazilian soy export season continues and farmers stall soy transport to ports, a local shipping agency reported.

 

Stocks were 234,750 tonnes on Monday. The total, however, does not include soy stocked in private warehouses, including those of multinationals such as Bunge, Cargill, Archer Daniels Midland, and Louis Dreyfus. 

 

Stocks of GM soybeans, now permitted to leave the Bunge terminal in Paranagua, dropped to 10,150 tonnes on Wednesday from 18,650 tonnes on Tuesday, Transcar's booking department said.

 

Two ships--one heading for China and another to Europe--are currently loading soy, with eight scheduled to arrive within the next two weeks, said Joana Matos, a booking agent at Transcar.

 

Farmers are protesting low local commodity prices in the centre-west. They have effectively closed grain silos and commercial transport out of Mato Grosso and Mato Grosso do Sul states. Smaller protests are ongoing in Goias, Sao Paulo, Parana and Bahia.

 

Local news broadcaster Globo News showed lines of tractors blocking railroads owned by America Latina Logistica in Parana on Wednesday, causing soy shipments to depend on truck delivery. As a result, Matos said there is a 25-kilometre back-up of trucks waiting to get into Paranagua.

 

Globo News also showed protests getting more violent in Mato Grosso do Sul, with local police using police batons against some protesting farmers.

 

Leaders of various centre-west farm associations met with Agriculture Minister Roberto Rodrigues Tuesday evening to discuss emergency farm aid packages. Recent emergency aid announcements were too dependent on debt extensions made by government banks, farmers said, but most farmers in the centre-west rely on private creditors.

 

During the meeting, a private and public sector working group was created to address issues of farm risk insurance and government purchases of local commodities.

 

Government agriculture officials have already hinted, however, that soybeans would not be included in the government's purchase programme because of the sheer volume. But, they hinted other options are on the table to lower taxes on crop input purchases such as fertiliser, and include soy in Brazil's burgeoning biodiesel  programme.

 

Rodrigues said the administration of President Luiz Inacio Lula da Silva understands the current farm crisis and that it could have medium- and long-term implications on the economy, the local Estado newswire reported Wednesday.

 

An expected 12-percent reduction in planted area and an eventual strengthening of the dollar will make commodities more expensive and have an impact on inflation, Rodrigues said.

 

Soy farmers reduced their planting area by 5 percent in the 2005/06 crop and are expected to do that again in 2006/07, judging by conservative consensus estimates.

 

The US dollar fell 0.15 percent to 2.058 Brazilian reals in intra-day trading on Wednesday, adding to farmers' disinterest in selling their remaining soy volume to soy crushers and exporters.