The Brazilian animal protein association, ABPA, said the sector lost R$ 3.15bn (US$ 839m) after 167 chicken and pork abattoirs halted operations while lorry drivers blocked roads and highways. Meanwhile, the strike is also likely to have hit the Brazil-based meatpacker JBS and its peer BRF, the world's biggest poultry exporter.
The strike could cost Brazil's ailing economy more than R$15.9bn (US$ 4.2bn), shaving 0.2 per cent off gross domestic product this year, according to the government. "Now, it is likely that we won't have real growth," he said. João Carlos Basilio, executive president of ABIHPEC, the body that brings together the makers of personal care and hygiene products in Brazil, including Unilever, Colgate-Palmolive, Avon and Procter & Gamble, said that before the strike the industry expected sales of more than R$118bn in 2018. "Some people started to get worried about the lack of goods but we managed to stay afloat," she said.Īlthough things have now returned to normal, Viva Lácteos, the association of Brazilian dairy producers, an industry group that represents local and global companies, including Mondelez, Danone, and Nestlé, estimates the sector lost about R$1.3bn (US$349m) following the discarding of 360m litres of milk. Verônica Brito, who manages a grocery store in central São Paulo, said that during the strike, the shop was short on perishables, such as dairy products - an almost empty shelf usually packed with milk and cream cheese was testimony to that. Stocks ran out in a few places but "we have also seen volumes picking up after the strike ended," Heineken said.Ĭoca-Cola said only that the strike, which lasted 10 days between late May and early June, had "impacted" on its Brazilian operations.īernstein Research predicted that among US companies operating in Brazil, cosmetics group Avon, Colgate-Palmolive, Kimberly-Clark, Procter & Gamble and PepsiCo, among others, were likely to be hardest hit. Rival Heineken said on Friday that although the strike had caused "major disruption" to supply chains, the blow was cushioned by having a few weeks' supply in the system. And yet, things are far from normalīudweiser brewer AB InBev, which makes 16 per cent of its sales in Brazil, declined to comment. Supplies were back in the shops, and trucks back on the roads. Analysts at Goldman Sachs said: "The challenges Unilever has faced in Brazil are unlikely to be entirely company-specific and we believe a similar headwind to other consumer staples companies with a meaningful exposure to Brazil is likely to include AB InBev, Ontex, Heineken and Danone." Brazil accounts for 6 per cent of the Anglo-Dutch group's sales. Unilever, producer of Dove soap to Magnum ice cream, was the first to quantify the damage when it warned last week that revenues in its second quarter, ending June 30, would be reduced by €150m. More to learn as time goes on.Multinationals operating in Brazil are counting the cost to their revenues following a nationwide trucker's strike that brought the country to a near standstill, disrupting supplies and hitting Latin America's largest economy. In the medium term this may result in soybean business shifting to US if this situation does not improve. Port basis has increased yesterday and today and interior soybean prices are down 10% to 15%. The likely implication is lower prices for farmers and higher port basis for Brazil in exports. As a result, freight contracts are being broken and many grain trades and sales contracted before the strike at a profit now show a loss.Īlmost all soybean and corn trading has come to a halt (spot and forward contracts) as traders are waiting for further development to start up operations. It is not clear how this will work and if the Congress will make any changes, but the reality is that freight prices have increased around 40%, depending on location. The minimum price was released and put into operation this week and the Brazilian Congress has 60 days to suggest changes. One of the government concessions to truckers was a minimum freight price within the country. With the end of the the trucker strike in Brazil, the majority of the agricultural sectors in Brazil are returning to normal a pace but impacts of the strike ranging from industrial production, to inflation and GDP expectations will linger.įor the grain sector the immediate problem is the resulting adjustment in freight prices.
#Brazil trucker strike update
Emerson Wohlenberg in Sao Paulo prepared this excellent update of the aftermath of the trucker strike in Brazil.
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