May 22, 2015

Ports in Argentina encounter a series of Setbacks

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Activities at the main port complex in Argentina have been disrupted by a series of recent setbacks. Among them has been a strike by workers at the soybean crushing plants that has shut down operations at 40 facilities for 16 days. The result has been loading delays for up to 30 vessels scheduled to load soybean oil and soybean meal. It has also impacted farmers who cannot deliver their agreed upon soybeans to the closed crushing facilities.

The workers had originally demanded wage increases of 48%, which has since been lowered to 42%. Companies for their part, started the negotiations by offering 24% wage increases and they have since increased their offer to 27%. Union leaders are adamant that a 27% increase is not acceptable. Additional negotiations are ongoing.

In addition to the work stoppage, the ports are now faced with a vessel that ran aground in the Parana River that is blocking the movement of 48 other vessels. The vessel Nord Hydra ran aground on Monday and as of Thursday, tug boats have not yet been able to dislodge the vessel.

Approximately 80% of Argentina's agricultural exports move through facilities located in the cities of San Lorenzo, Puerto General San Martin, and Timbues, which are all near the city of Rosario located on the Parana River. These setbacks could not have come at a worst time because farmers in Argentina are in the midst of harvesting a record large soybean crop and Argentina is a major exporter of soybeans, soybean meal, and corn.

The Argentine government has been struggling to help settle numerous strikes by various nationwide unions. On Thursday, they announced a successful resolution of strikes by five different unions. The main unions in the group include the metal workers, the civil servants, and the construction workers. The wage increases granted for these workers averaged 27%, which the workers claim is not even enough to keep pace with inflation.