End of Brazil's safrinha to 'reignite' truck freight issue: trade

The end of Brazil's second-crop corn harvest – or safrinha – could reignite tensions over the country's minimum freight rate formulas, as the end of the harvest cuts truck demand from farmers and exporters. 

Brazil's transport regulator ANTT introduced the new freight rate formulas, but was then forced to immediately suspend them, prompting negotiations between the government body and Sao Paulo's truckers union Fertrabens.

The safrinha harvest – which usually concludes at the end of September – tends to push inland freight rates to annual highs as demand for trucks to move the vast crop increases.

This year, freight rates have surged by up by 10% in some cases within a month, with the harvest coming earlier than usual after pressure to grow soybeans in the first crop saw corn plantings completed earlier.

But with the completion of the safrinha harvest, any agreement that may be thrashed out now between truckers and ANTT might face strain, according to sources familiar with the matter.

“It’s a matter of supply and demand, higher prices during the safrinha, but they usually fall after,” Geraldo Isoldi from a broker H. Commcor DTVM told Agricensus.  

“When the freight rate returns back to normal levels, the truckers will make more noise,” a Brazilian broker said.

“Freights are higher than the [minimum freight] table and no one is complaining… they [the truckers] aren't protesting,” another Brazilian broker told Agricensus.

The new minimum freight calculation tables, introduced last week but suspended this Monday, were opposed by truckers on the basis that they included too many variables and also made it difficult to accurately calculate future profit.

“The main complaint of truck drivers was that the table did not contain the forecast of profit, that is, the remuneration for the activity,” a Brazilian broker told Agricensus.

The old minimum freight table, now back in use, was originally introduced in May 2018 when a spike in diesel prices sparked a wave of strikes and paralyzed Brazil.