Brazil Trucker Strike Worsens As Petrobras Workers Plan Walkout

Brazil's crippling trucker strike entered its eight day on Monday, affecting virtually all aspects of the country's economy as vital resources have been unable to reach their destinations. 

The protests, triggered by a 50% spike in fuel prices over the last year, resulted in the declaration of a state of emergency across most major cities as shelves run bare and vital supplies dwindle. Airports have reported running out of fuel, hospitals are running out of supplies, and public transport and trash collection have been reduced or halted across the country. Some food prices have also spiked as supplies dwindle. As we noted on Friday, a lack of livestock feed threatens a billion chickens and 20 million pigs who may starve to death.

Now, after deploying the military to physically unblock roads and several last-ditch measures to seek a resolution Sunday night, President Michel Temer has a new problem on his hands; Petrobras workers are about to go on strike starting May 30demanding that the company fire CEO Pedro Parente and permanently lower fuel prices. The company said on Friday that they have no plans to remove Parente. 

Petrobas attempted to calm the striking truckers last week by lowering the price of diesel by 10% for two weeks, a move which did not impress the truckers. Shares of Petrobras have dropped 35% since May 16

Minor progress in the strike was achieved over the weekend, as most of the nationwide roadblocks were at least partially opened, allowing passenger cars to pass freely. The governor of Brazil's most populous state of Sao Paulo also negotiated a deal Saturday night with truckers' representatives to remove the roadblocks until Tuesday, while also guaranteeing provisions for essential services. 

Police escorts helped tanker trucks reach key fuel depots and gas stations after some people chose to sleep in their cars, sometimes waiting more than 12 hours in line for fuel. While delivery of essential medical supplies is improving, supermarkets still face shortages of perishables such as fruit, vegetables and eggs. The meat producers association ABPA said poultry growers have lost 64 million chickens. Brazil is the world’s largest poultry exporter. -Bloomberg

That said, the road openings and delivery of vital supplies appear to be nothing more than band-aids, which include a Sunday night cut in the price of diesel.

Mr Temer said the diesel price cut would be valid for two months, after which there would be price adjustments only every month rather than on a daily basis. “This way the truck driver can better plan his costs and the value of his freight,” the president said. -FT

Throughout this week, my government has always been open to dialogue,” said President Temer during a brief announcement on national television, conceding a cut of R$0.46 per litre, or an average of about 12 per cent. 

Meanwhile, one billion chickens and 20 million pigs continue to be at risk of starvation, as feed supplies are still unable to reach farms according to Brazilian export group ABPA. A leader from ABPA reportedly met with the Temer administration late Sunday, according to Bloomberg.

ABPA said that over 150 poultry and pork processing plants had indefinitely suspended production, while Brazil's sugar industry - the world's largest - is slowly halting cane harvest operations as their machines run out of fuel. 

The drivers, many of them owners of their own vehicles, have organised themselves through WhatsApp groups and social media and are fiercely opposed to a government they see as corrupt and rapacious. Many of them are calling for a military “intervention” or coup to take over the government. 

This revolt by the truckers is the embryo of a tax rebellion,” said Brazilian economist Eduardo Giannetti, who is also an advisor to one of the candidates in Brazil’s October elections, environmentalist Marina Silva. Speaking in an interview with Folha de S.Paulo newspaper, he said like the American Revolution, tax rebellions began when “the population no longer accepts the legitimacy of the government to tax it. -FT

Other measures offered by the Temer government to ease the situation include special concessions at toll booths, legislation to establish minimum freight pricing and a guaranteed share of government-contracted commodity deliveries. 

Comments

beemasters Socrates55 Mon, 05/28/2018 - 16:55 Permalink

"As we noted on Friday, a lack of livestock feed threatens a billion chickens and 20 million pigs who may starve to death."

Please stop making it look like it's about the livestock. It's not. They will die with or without the strike. But yeah, we got it (for the third time)...Bad, heartless truckers for killing these poor animals.

PS... This is about Citizens vs (corrupt) Government/corporations. We know who gets to control the narrative.

In reply to by Socrates55

bshirley1968 CheapBastard Mon, 05/28/2018 - 18:51 Permalink

I am afraid that the world is about to wake up to the reality of an energy crunch.

No way we can maintain 95 million barrels a day for much longer......at these prices. Cost are ramping, energy sector has pricing power, and their debt levels are rising. Peak oil....not an issue. Peak Cheap Oil? You bet your ass. Also it is a natural goto tax increase item for all governments that have burned through everything else.

We have more oil above ground than ever before and end user prices are about to go up.....forever.

In reply to by CheapBastard

bshirley1968 bshirley1968 Mon, 05/28/2018 - 21:16 Permalink

I see you doubters can down vote but can you offer an argument to the contrary?

Governments need money and they aren't getting it from wage growth. They will tax what they can, and energy fits the bill.

The developed world economies need inflation for their debt ponzi schemes. Where do you think they get it, flat screen Teevees? Cell phones? Maybe Bluetooth speakers. The only pricing power is in food, energy, and must have software up dates.

In reply to by bshirley1968

gdpetti SeuMadruga Tue, 05/29/2018 - 09:46 Permalink

Centrally planned from the Boys in Langley and DC.. that's what you mean by 'centrally-planned' right? As we were the ones that did a regime change in most of Latin America.... Brazil, Argentina, etc... busy in Venezuela these days.

Best to remember the gameplan is global chaos.. .'out with the OWO, in with the NWO'... same masters, only they are getting rid of their puppets... so enjoy what's left of their final performance, it promises to be a blast!

In reply to by SeuMadruga

Ilmarinen beemasters Mon, 05/28/2018 - 17:08 Permalink

I see the livestock anecdote as a vivid illustration of what's at stake. While a reduction in poultry supplies by 1 billion chickens will certainly affect that market, the more important effect will be spreading the wrath of the truckers to other industries.  The farmers will not tolerate such losses, and will pick sides one way or another.

I'd say it's less "won't somebody think of the piggies?!" and more "expect things to go to 11 real soon".

In reply to by beemasters

beemasters Ilmarinen Mon, 05/28/2018 - 17:13 Permalink

People need to see the bigger picture. This is about citizens' power when they really come together for a cause. Governments/corporations fear this and will do whatever it takes to divide the populations on this or any issue. The subtle shift in media to bring into attention the suffering of the animals due to the truckers' action is lame.

In reply to by Ilmarinen

Weirdly Mr. Universe Mon, 05/28/2018 - 18:30 Permalink

The Cornish Cross is an awesome breed of chicken.  If you get them out on pasture early they will scavenge with the rest of the breeds.  And they grow 30% faster.  Just don't overfeed them.  If you are raising them for meat you can't go wrong with them.  If you want a tiller bird for a rotation garden get australorps.  

In reply to by Mr. Universe

Faeriedust Ilmarinen Mon, 05/28/2018 - 21:23 Permalink

I see it as pointing out the fragility of supply chains that depend on many unrelated links all working together without a hitch.  As governments and large corporations lose power due to their loss of legitimacy, those links can't be guaranteed, and businesses like confined animal feeding operations, which have to ship feed across vast distances, will become too risky compared to smaller operations that raise their own feed in combined agricultural operations.  Prices will go up because these operations don't have the economies of scale that the larger ones do, but they won't be run out of business by interruptions in transport as those become more common.  They are also less likely to sell through international commodity markets and more likely to sell locally or at least regionally.

In reply to by Ilmarinen

serotonindumptruck Mr. Universe Mon, 05/28/2018 - 17:57 Permalink

No, we just need to man up and take to the fields to sow and harvest our own food.

This entire "illegal immigration" argument is a false paradigm, as there aren't any welfare dependent Americans who are willing to work 12 hours a day for $8 an hour picking fruits and vegetables.

Washington DC politicians are lying to everyone in an effort to divide the nation.

Divide and conquer is the mantra of every politician, as those politicians will all sit as an effendi and eat, while the serfs labor in the fields.

In reply to by Mr. Universe

Faeriedust serotonindumptruck Mon, 05/28/2018 - 21:27 Permalink

Nobody is particularly willing to work their ass off so that somebody else can live it up.  I recall a situation where I worked for a small business where everyone knew the owner.  As another tech put it, "No, I'm not interested in working overtime without pay so Craig can build a bigger back deck.  Let HIM come in and run the program."

When the business owners are willing to pay decent wages, Americans will line up to apply for the jobs.  Americans are willing to work hard, work long, work smart, and work fast -- but they AREN'T willing to work for next to nothing.

In reply to by serotonindumptruck

RedBaron616 DosZap Mon, 05/28/2018 - 16:53 Permalink

Stopping all truck traffic will just make things much, much worse. Now they are destroying economic activity which will never be recouped. An example is the chicken and pork plant shutdowns. These are lost wages and since it appears some animals will either die or be underweight, this is all economic losses forever gone. 

They all want socialism. We will strike until we get the diesel price we want. Well, in the meantime, you are making exactly ZERO money. Figure out how THAT pays your bills, truckers.

Like many Latin American countries (okay, so they speak Portuguese in Brazil, I know), they probably subsidized fuel prices for decades. This, of course, costs either the government, or in this case, the government oil company. This creates excess demand and there is little value to conserving it. Note that trucks on American highways have aerodynamic fairings everywhere in order to be more efficient.

In reply to by DosZap