Brazilian truckers’ strike brings Latin America’s largest economy to a halt
Latin America’s largest economy ground to a halt. Several McDonald’s restaurants ran out of hamburger buns and chickens ran out of feed and started eating each other. Fuel ran out at the airport of the nation’s capital, Brasilia, while politicians scrambl
SAO PAULO, Brazil: A truckers’ strike that has thrown Brazil into chaos entered its sixth day, with protesters blocking traffic on hundreds of highways, supermarkets rationing fruit and gas station pumps running dry.
Sao Paulo, Brazil’s financial centre and home to 12 million people, declared a state of emergency on Friday. By Saturday, eleven airports around the country had run out of fuel. Uber drivers joined the strike and blocked trucks from exiting an oil refinery in northern Brazil. The government urged Brazilians to limit their water consumption, as uncertainty grew overlong the strike would last.
President Michel Temer ordered the military to break up the strike, and the government said late Friday that 45 per cent of barriers on the highways had been removed. But the truckers’-union said it still wouldn’t deliver any goods.
A 50 per cent rise in fuel prices over the past year sparked the strike. Truckers are demanding lower gas prices, as well as reductions in taxes and tolls.
For years, Brazil’s statecontrolled oil company Petrobras kept fuel artificially cheap. But last July, in an attempt to keep up with rising international oil prices and a weakening local currency, Petrobras decided to follow global prices. The decision allowed the company to turn a profit for the first time in years. But almost daily price adjustments have been tough on truckers, many of whom work independently and cannot raise their rates mid-route.
“We are fighting for everyone. If fuel prices get better, everything will be cheaper,” said Fernando Prado, 36, a selfemployed trucker for nearly two decades who transports electronics. He estimates that 70 per cent of his profits are eaten by fuel costs.
Prado parked his truck on a highway outside Sao Paulo on Wednesday and hasn’t moved it since. He recalled the chronic inflation Brazil suffered in the early 1990s, when his parents had to run to the market multiple times a day to beat rising prices. Today, he said, truckers are the ones bearing the brunt of the crisis. “The transportation sector is absorbing the inflation. The cost of fuel goes up but the price of goods stays the same.”
On Wednesday, Petrobras announced it would slash prices by 10 per cent for two weeks to try to placate the strikers. But the decision, which cost the company US$ 96 million, did little to quell the protests.
Instead, Latin America’s largest economy ground to a halt. Several McDonald’s restaurants ran out of hamburger buns and chickens ran out of feed and started eating each other. Fuel ran out at the airport of the nation’s capital, Brasilia, while politicians scrambled to get on the limited available flights.
International commodities markets were stunned as Brazil, a leading exporter of sugar, coffee, meat and soybeans, could no longer guarantee shipments.
Brazil is particularly susceptible to transportation strikes. Trucks transport an estimated 64 per cent of the country’s goods. The strike is expected to cost Sao Paulo alone US$ 158 million a day, according to the city’s federation of goods, services and tourism. The strike led to immediate price spikes, with some supermarkets charging 50 per cent more for vegetables on Friday. Prices are expected to rise further as factories run out of raw materials, according to Joelson Sampaio, an economics professor at the Getulio Vargas Foundation in Sao Paulo. “The long-term impact on the economy will depend on how long it lasts. If we resolve the situation this weekend, it will be marginal. If it goes on for a month, that’s a different story,” he said. — WPBloomberg