November 18, 2005


Brazil's industrial strike delays chicken and pork exports


An ongoing strike of national agricultural inspectors in Brazil is preventing exports of chicken and pork and could seriously affect industry revenues if the strike is prolonged, sources said.


Brazil has already lost US$140 million in chicken export revenue due to the strike, now in its 10th day, the Brazilian Chicken Exporters Association, or ABEF, said Thursday. The strike could seriously affect industry earnings if it is prolonged, ABEF said.

"During the 10 days of the strike, the sector has lost sales of US$140 million, and there are already some slaughterhouses that have stopped slaughtering (chickens) due to the strike," said ABEF president Ricardo Goncalves in a press release.


The agricultural inspectors, who started their strike on Nov 7 to protest for higher wages, are responsible for certifying meat for both the domestic and international markets.


Since the strike started, however, exports have been backlogged and are now overrunning the storage warehouses at some of the country's ports.


"Storages are full, containers are full, trucks are full, storages in plants are full," said Pedro de Camargo Neto, the president of the country's Pork Producers and Exporters Association, known as Abipecs, in a phone interview with Dow Jones Newswires. "We're definitely losing shipments because of the strike."


But the actual damage across the agricultural sector is hard to quantify, Camargo Neto added.


For one, a federal law states that federal organisations must keep 30 percent of their workers on the job even if the organisation enters into strike.


"While this means that around 30 percent of the inspectors are still working... it doesn't mean that the export volume from these ports is only 30 percent," Camargo Neto said. "The situation is different in every state and every port. In some states it's better, in other states the strike is stronger."


For example, conditions at the country's no. 1 port of Santos near Sao Paulo-where most beef exports are shipped-are much better than at the Itajai port in Santa Catarina, from where a great majority of chicken and pork exports are shipped, he said.


"I don't like to talk about numbers, but we're losing shipments," he added.


At the country's no. 2 port of Paranagua, however, the situation so far appears to be under control, according to industry insiders.


"We're accustomed to strikes like this in Brazil," said Gustavo Fanaya of the Parana meat industry association, Sindicarne. "At least 30 percent of the inspectors have been working since Monday, after we asked the court to decide on the law... which means that (export) movement is slow, but at least there is still movement," he said.


Industry figures had said Wednesday that they hoped the strike could be called off by the end of the week, but Thursday they said the strike could continue indefinitely.


"Negotiations are not going well. There was... a meeting yesterday, and after that meeting, everyone got much more pessimistic," said Camargo Neto.


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