Argentine grain exports hit by port workers' strike

May 24, 2013 at 5:08 AM
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BUENOS AIRES, May 24 (UPI) -- Argentine exports suffered another blow as dock workers continued their go-slow and strikes in the Latin American country's ports.

Argentine exports of grains and perishable goods are especially hit after three days of the stoppages and many loaded vessels will likely end up with spoiled merchandise before the industrial action is over, industry analysts warned.

Industry estimates say the trade losses could run into tens of millions of dollars.

Argentine President Cristina Fernandez de Kirchner is struggling to meet shortfalls in the country's foreign exchange holdings. The strikes are seen by officials as ill-timed and are frequently condemned as unpatriotic.

Argentine traders hoped to capitalize on recent low yields of grain crops in the United States and recent trends indicated that Argentine traders could be handed windfall profits. The strikes have put paid to that optimism.

The dockers are demanding higher wages to reflect Argentina's runaway inflation and have vowed to continue their action until demands are met.

Argentine port system is vulnerable to frequent disputes, often hitting not only Argentine trade but also trade from land-locked Paraguay passing through the country's waterways.

Argentina is the third largest exporter of soy and corn and leads the world in supplies of soy oil and soymeal.

More important, analysts said, the country's continued isolation in international capital markets makes Argentina increasingly dependent on agricultural earnings for its gross domestic product. However, government curbs on foreign currency movements have added political tensions between officials and traders and forced many grain exporters to cut back on labor -- seen as one of the causes of the current unrest at the ports.

Industry data showed more than 100 ships were idle at Argentine ports. The port crisis is expected to get worse as the U.S. dollar continues to slide against the Argentine peso in "informal" currency markets.

Argentine stocks slipped on concerns over the "black market dollar," the Buenos Aires Herald reported.

About 80 percent of Argentine exports of grains and oilseeds leave from Rosario on the Parana River, one of the ports affected by the industrial action. Rosario is also a port complex most vulnerable to strikes because movement of all ships in and out of the Rosario port system, which includes several docks, is tightly controlled by worker unions.

The U.S. crop slowdown and rising demand drew more shipping than usual to Argentine ports.

Talks are under way to resolve the labor conflict, officials said.

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