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Brazilian Farm Custom Inspectors Strike

Brazilian farm customs inspectors have been on strike since Thursday, raising concerns that grain exports will be hampered.

Union representatives met with government officials on Friday evening to discuss the inspectors' main demands, which focus on career structures and pay, but little progress was made and indefinite strike action continues.

Without the certificates issued by the inspectors, many corn and soybean shipments cannot leave port, causing major delays.

Brazilian soy exports are winding down but it is peak season for corn.

Approximately 70% of inspectors were on strike Friday and one of the main focuses of the movement is to impede grain and meat shipments, according to Roberto Siqueira, communications director at the Brazilian Federal Farm Inspectors Association (ANFFA).

The Brazilian Grain Exporters Association (ANEC) is pressuring the federal government to find a quick solution to the strike, which could lead to shipment delays and rising demurrage costs, Sergio Mendes, ANEC director general, told journalists.

He explained that the immediate impact is limited but it would grow if the industrial action were to go beyond ten days.

Brazil has risen to establish itself as a top 4 exporter of corn over the last decade. Following a bumper second crop, 2015 exports were expected to top the previous record of 26.2 million metric tons with some forecasting shipments as high as 30 mmt.

But Brazil exports have to accelerate dramatically if the record is to be broken. Up to the start of September, Brazil had shipped just 8.8 mmt, according to government figures.

The demand is probably there to accelerate as Brazil enters its high season. Ship line-ups indicate exporters want to load 5 mmt in September. But September loading was already delayed because of persistent rains in Paranagua and Santos during the first half of the month and the strike will only exacerbate the situation.

ANEC's Mendes noted that delays would be very bad for Brazil's image in the corn market.

The dispute between the inspectors and the governments seems far from intractable.

The union is demanding that the classification of farm customs inspector be adjusted, something it claims was promised as part of negotiations in 2012, and a two-year structure for pay increases instead of a four-year structure.

"The other demands are secondary. What we are looking for is quite modest," said ANFFA's Siqueira.

But the government, which is currently in dire fiscal straits, has yet to come back with a counter-proposal.



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