July 13, 2017 / 7:00 PM / a year ago

UPDATE 1-Brazil highway protests threaten grain exports from northern ports

(Adds information from Abiove, Anec, Bunge statement)

By Jose Roberto Gomes and Ana Mano

SAO PAULO, July 13 (Reuters) - Brazil’s oilseeds industry group Abiove on Thursday said cancellation of contracts to ship grains including soy and corn through the northern port of Barcarena is “inevitable” after protests blocking a key highway.

The blockade, which began more than a week ago at the BR-163 highway, is preventing trucks from unloading grains at the riverside hub of Miritituba, from where barges carry crops to Barcarena and Santarém ports before hitting export markets.

The highway is the only route to Miritituba, the final stop for trucks carrying loads from Mato Grosso, which is currently harvesting its winter corn. Groups are protesting a veto by President Michel Temer of legislation that would reduce the area under protection at a national forest in Pará state.

The situation underscores how Brazilian logistical woes hamper the country’s efforts to consolidate its position as a reliable global commodities supplier.

If disruptions persist, grain shipments at the port in Miritituba could ground to a complete halt by Friday, Abiove said.

“Even if the blockades are called off and freight services resume at Miritituba, it would take several days to reorganize the flow of trucks and barges,” said Daniel Furlan Amaral, Abiove manager.

Cancellation of shipping contracts at the port of Barcarena is “inevitable,” he said. Other northern ports such as Santarém can be fed through alternative waterways or railways, Amaral said.

Abiove estimates 120,000 tonnes of grain are stored at warehouses in Barcarena, enough to load two ships.

The Brazilian unit of Bunge Ltd, which operates terminals at Miritituba and Barcarena, said in a statement the blockades would affect its grains shipping schedule and cause losses.

Cargill Inc, which operates in Santarém, declined to comment and referred inquiries to Brazilian private ports association ATP, which has previously said it expects $47 million in losses this month from the protests.

Brazil’s cereals exporters association Anec estimated the disruptions could cost producers $400,000 per day and rerouting exports through southern ports would add 50 reais ($15.57) per tonne to freight costs.

Anec data showed 30,000 tonnes of grains pass daily through Miritituba with final destination to the northern ports of Barcarena and Santarém. Anec estimates grain exports at these ports will reach 8.7 million tonnes this year.

Northern ports including São Luiz, Itacoatiara, Santarém and Barcarena exported 19 percent of Brazilian corn and soy last year up from 17.2 percent in 2014, according to government data.

$1 = 3.2119 reais Reporting by José Roberto Gomes and Ana Mano; Writing by Ana Mano; Editing by Lisa Shumaker

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