One Billion Chickens May Die As Trucker Strike Paralyzes Brazil

A billion Brazilian chickens and 20 million pigs may die within days - starving to death amid a nationwide truckers' strike over soaring fuel prices which has prevented critical supplies such as animal feed from reaching their destinations

[E]xport group ABPA said a billion chickens and 20 million swines may die in coming days due to a lack of feed." -Bloomberg

As the strike entered its fifth day on Friday - completely ignoring a Thursday night agreement, Sao Paulo declared a state of emergency due to the lack of vital resources for its more than 12 million residents. 

President Michel Temer deployed national security forces to unblock roads amid warnings that supply disruptions risk causing a public calamity.

I have actioned the federal security forces to unblock highways and I am asking governors to do the same,” Temer said in a televised address on Friday. “We will not let the population do without its primary needs.”

"Those who act in a radical manner are harming the population and they will be held responsible."

Temer chose to deploy federal forces after meeting with ministers for a "safety assessment" in the country, as the truckers' strike continued, despite the agreement between the government and representatives of the category on Thursday night.

The government has also called the Federal Supreme Court for the strike of the truck drivers to be declared illegal. -Globo

While the strike initially started on Monday over fuel prices, it has rapidly evolved into a widespread protest against government graft scandals involving several prominent politicians - Temer included. 

Despite the deployment of forces, Carlos Marun, Minister of the Government Department, admitted that the demands of the striking truckers are "just." When asked whether the government negotiated with the "wrong people," since roads continue to be blocked despite the Thursday agreement, Marun joked that it wasn't feasible to talk to all the truckers at once. 

"This is a scattered and diffused movement, and I recognize that the leaders we talk to do not have the power to turn off the movement like someone who turns off a power switch," Maron said, adding "We talked to who we had to talk to, we prepared ourselves since Sunday, and considering fair claims, we decided to negotiate before taking any more radical measures."

The Government Minister did note, however, that the lack of action by the truckers caused the Friday deployment of government forces and the possible use of force.

"Because of non-compliance, we will have to use what we would not like, the possible use of force ... in order not to diminish movement, we are making use of measures that are necessary. , at the moment, it is necessary, "he said.

Meanwhile, supermarkets and restaurants in São Paulo and Rio de Janeiro are running out of supplies, several factories have been shut down, and bus services have been significantly reduced due to the strike. 

In an attempt to end the dispute, oil company Petrobas cut the price of diesel by 10% for two weeks - however all that did was scare investors. The truckers were not impressed, considering that they've been subject to fuel price increases of around 50% over the last year.

Petrobras shares plunged after the announcement and are down at least 20 percent this week, leading losses in the Ibovespa index, which has lost 4.3 percent in the period. That pushed the stock market’s monthly drop to 7.7 percent, one of the worst performers among major global benchmarks.

The currency lost 4.3 percent in May amid generalized turmoil in emerging markets and as the central bank unexpectedly halted its easing cycle.

The strike will affect virtually all aspects of Brazil's economy. RTL Today reports that Brazil's auto industry completely shut down on Friday due to the strike.

"Assembly lines of Brazilian car manufacturers have stopped. The truckers' strike will affect our results significantly, including for exports," the National Association of Motor Vehicle Manufacturers said, on the fifth day of the strike.

Meanwhile, the airport in Brasilia reports that its kerosene reserves have run outforcing American Airlines to cancel a flight from Miami originally destined for the Capitol city Friday morning, along with an evening return flight. And in yet another sign of impending calamity, the largest port in Latin America is reportedly running out of soybeans. 

The strike has also significantly damaged conservative President Temer's reputation, along with those in his orbit. 

While the president has abandoned plans to run for re-election in October, those candidates associated with his government or even those merely sympathetic to its market-friendly agenda have been dealt a major blow. Brazil’s presidential contenders have been reluctant to criticize the strikers, though some have questioned their tactics.

Raul Jungmann, minister of public security, said that authorities would be investigating whether trucking companies were prohibiting employers from working, which would be a violation of Brazil's "lockout" laws.