Argentina's planned farm strike could increase corn price
Scores of grain export vessels will be delayed in Argentina next week due to a planned sales strike by farmers, potentially causing millions of dollars in extra shipping costs to be passed along to final consumers, a key port official said on Thursday.
The South American grains powerhouse is the world's No. 3 corn and soybean supplier. But growers have a contentious relationship with the government and have called a five-day suspension of crop sales starting on Saturday to protest President Cristina Fernandez's trade and economic policies.
A total of 149 ships were already lined up along Argentina's waterways on Thursday, waiting to load corn, soy and other agricultural products. The corn market is particularly hungry after a U.S. drought in 2012 dramatically reduced world supply.
Exporters have prepared for the strike by buying more than usual in the country's key grains hub of Rosario.
"Yesterday, exporters bought more corn than usual in anticipation of the strike. That should continue today and tomorrow. If not, they'll be short next week," Guillermo Wade, head of the port industry chamber for the Parana River, Argentina's key grains thoroughfare, said.
Corn supplies are lacking after farmers interrupted harvesting to bring in this season's soy crop, soy being Argentina's main agricultural export. Growers originally planned to harvest and sell a good amount of corn next week before the protest was planned.
"Corn stocks at port are very low," Wade said. "A week without revenue will delay the meeting of shipping commitments."
"Exporters are going to have to pay for the extra moorage of boats that are out there waiting for corn. That's going to mean a big loss of money - an average $20,000 per day per ship - which will be passed on to the final consumer," he added.
Farmers have brought in 74 percent of their 2012/13 corn and 97 percent of their soybeans, according to Argentine government data released last week.
Pablo Adreani, director of the local Agripac consultancy, was less pessimistic about the effect the strike would have on export flow.
"Corn stocks are low, but there is enough scattered around the different ports to get through next week without major shipping disruptions," Adreani said. "Only a third of the ships that are waiting to be loaded will be delayed."
The impact of the strike will be focused on sales, not logistics. So any drag on exports will depend on reserve levels at the end of business on Friday.
"It's hard to say how many ships will or will not be delayed. That will depend on how much extra buying takes place today and on Friday," a well-placed local industry source said on Thursday, asking not to be identified.
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