Strike at Peru's Top Port May Stoke Inflation

Port of Callao

Published Jun 1, 2015 4:46 PM by Reuters

A dockworkers strike at Peru's biggest port, Callao, has hit imports of basic goods in the Andean country and will likely stoke inflation, the main exporters association said Monday.

The 18-day strike has nearly frozen activities at the northern terminal of Callao at the edge of the capital Lima, prompting $100 million in lost revenues for merchants, the Exporters Association of Peru (Adex) said.

Some 26 ships are waiting to be unloaded and serviced and another 10 are expected to arrive this week, Adex said.

"This week there will be a shortage of essential products," said Adex spokesman Juan Carlos Leon. "There won't be enough flour, feed for chickens, industrial supplies."

Inflation jumped a higher-than-expected 0.56 percent in May, leaving the annual inflation rate above the central bank's target ceiling for a third straight month.

The strike has not affected mineral shipments, which pass through a different terminal, Leon said.

APM Terminals, owned by A.P. Moller-Maersk, operates the northern terminal, which handles 75 percent of Callao's capacity.

Dockworkers on strike are pressing for better working conditions and protesting the use of a new computerized system for selecting shifts that aims to help police investigate drug smuggling. The union previously picked shifts.

Peru is the world's top producer of cocaine, the White House has said. Local authorities have said they are increasingly finding cocaine packages hidden in containers of exported goods.

APM Terminals did not immediately respond to requests for comment.