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Brazil Beef Exports Hit Bottom

July 5, 2018

A truckers' strike in May that crippled traffic on Brazil's main roads and trade bans on the country's beef caused exports in June to fall to their lowest level for the month in 15 years, consultancy INTL FCStone said.

Citing data from the government, the consultancy also said Brazilian exports in June had their worst monthly performance since January 2011.

Brazilian beef exports totaled 54,390 tons last month, 45.4% below the same month in 2017. This compared with about 100,000 tons for June last year, the consultancy said citing government records.

The 11-day truckers' strike and uncertainty related to freight prices after the stoppage contributed to the slump, INTL FCStone noted.

"The drop in exports is mainly due to the difficulty to resume production (of meat) between late May and early June," said INTL FCStone. The truckers' strike affected shipments of frozen meats to the ports and disrupted delivery of animals for slaughter, it said.

"This led the sector to halt production, reducing supplies (also) in the domestic market," the consultancy said.

Freight prices rose domestically after the imposition of minimum prices by the government as one of the measures to persuade truckers to return to work.

Doubts related to freight prices reduced feed supplies, which had already been affected by a 20.5 percent rise in the price of corn after a drought affected the crop in key producing states, said the consultancy.

"Brazil's exporting sector still awaits to resume fresh beef exports to Russia, which was once the main destination of the national production," said INTL FCStone.

Brazilian beef exports to Russia have been banned since the end of last year, the consultancy noted. 

(Reuters reporting by Ana Mano; editing by Jonathan Oatis)

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