Grain trucks entering Argentina's main port of Rosario slowed to a trickle on Monday due to a five-day-old sales strike by farmers, but exports remained uninterrupted due to ample dockside reserves.
The sales freeze, set to end at midnight on Tuesday, was called last week by growers angry about national government agricultural policies and a recent tax increase in No. 1 soy- and corn-producing province Buenos Aires.
Argentina is a top exporter of both crops at a time of increasing world demand. Only 881 trucks entered Rosario in the 24 hours through mid-morning o n M onday, down from 3,800 on the same day last year, the Rosario grains exchange said on its website.
About 80 percent of Argentina's farm exports are shipped from terminals that line the Parana River at Rosario, offering quick access to the shipping lanes of the South Atlantic. "There were stocks piled up at the grains terminals before the strike started. If the strike ends tomorrow, as we expect it to, there should be no slowdown in the export rate," said Patricia Bergero, an analyst at the Rosario grains exchange.
As angry as they are about profit-siphoning wheat and corn export curbs imposed by President Cristina Fernandez and the land tax hike, farmers were not expected to extend their action past Tuesday or repeat the huge, 2008 tax protests that paralyzed the sector.
Many growers are eager to get back to business because they need cash after a six-week dry spell in December and January cut into crop yields.
"Aside from the strike, we had a drought that reduced soybean and corn production," Bergero added. "So anything that hinders the flow of grains to the market or to the ports is an issue to be watched."
The 2011/12 harvest, which is nearly collected, was also punished by May rainstorms that flooded parts of the Pampas grains belt, bogging down harvesting machines and forcing growers to leave some of their crops to rot. Supply concerns and signs that importers are switching from Argentine to U.S. cargoes due in part to the sales freeze, helped lift soybean and soymeal futures on the Chicago Board of Trade last week.
Argentina is the world's top exporter of soyoil, used in the booming international biofuels sector. It is also the No. 1 supplier of soymeal, used as cattle feed, particularly in China, where the fast-growing middle class is clamoring for beef steak. Trading companies with operations in Argentina include Cargill, Bunge and Noble.
The strike arrived at a time of slowing economic growth in Argentina, which is being hit by fallout from Europe's financial woes and slackening demand from No. 1 trade partner Brazil. So not only grains traders but the financial markets as well are going to be watching over the weeks ahead for growers' protests that might hit soy export tax revenue needed by the government as Fernandez tries to slow capital flight.
Fernandez, who has increased the state's role in the economy and needs to keep dollars in the country to repay public debt, said last week that she had decided to lead by example and swap her own dollar-denominated savings account for a fixed-term deposit in pesos.
Strike slows flow of grains to top Argentine port
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