May 25, 2018 / 6:09 PM / a month ago

Brazilian food companies hard hit by truckers' protests

SAO PAULO (Reuters) - Brazilian food companies will be reeling for months from the after-effects of a truckers’ protest that has blocked the country’s main roadways this week, industry sources said on Friday.

With the protests over fuel prices now in their fifth day and no solution in sight, meat group ABPA said the number of poultry and pork processing plants that had stopped production for lack of feed and storage space had risen to 152 units from 120 units, affecting more than 220,000 workers.

“The government must intervene in a quick and strong manner,” ABPA said, adding that 1 billion chickens and other fowl and 20 million hogs could die from hunger in the next few days.

Santa Catarina state-based meat group Sindicarne warned of the imminent threat of “a massive loss of biological assets in Brazil’s main producing regions.”

The state slaughters about a third of Brazil’s hogs and 15 percent of its chickens. The risk stemming from mass livestock deaths will cause “an unpredictable sanitary hazard,” Sindicarne said.

The trucking group leading the protests has rejected an agreement with the government to lift road blockades, which are causing fuel shortages and affecting grain exporters, automakers and others in the economy.

The food sector already is suffering from high feed prices and an investigation that resulted in plant closures and export bans this year. In the ongoing probe, federal prosecutors claimed some Brazilian companies colluded with federal health inspectors to evade quality and safety checks.

Brazil is a top supplier of foodstuffs ranging from soybeans to sugar and coffee, with the overall meat category accounting for $14 billion in annual exports.

BRF SA, JBS SA and Cooperativa Central Aurora, Brazil’s three largest poultry and hog processors, refused to comment beyond statements released earlier in the week. They have temporarily closed or suspended production at dozens of plants in connection with the truckers’ protests.

A source at a large domestic food processor who is not authorized to speak to the media said the entire supply chain, including hog and chicken breeders, will need months to recover.

A plant with capacity to slaughter 500,000 birds per day demands around 140 million reais ($38 million) in working capital and employs at least 3,500 people directly and indirectly, the source said.

“The situation is nerve-racking and our losses are incalculable,” the person said.

($1 = 3.66 reais)

Reporting by Ana Mano; Editing by Paul Simao

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