A strike that’s snarled Argentina’s soybean industry will continue during the Christmas holidays, further delaying 170 ships currently waiting at ports.
Soybean crushers at export plants agreed to extend a strike over wages during the Christmas season, according to a statement on the website of union group Federacion Aceitera. The strike, which has been going on for 15 days, has delayed shipments from the world’s top exporter of soy products, sending Chicago futures rallying.
There are more than 170 ships waiting to load and unload at ports in Bahía Blanca, Necochea-Quequén and Gran Rosario, Andrés Alcaraz, a communications manager at export group Ciara-Cec, said by telephone on Wednesday.
The strikes have caused delays to US$1.7 billion worth of exports in addition to costs directly related with the action such as demurrage, he said.
The strike has fueled soybean supply concerns at a time of vigorous global demand, sending prices of the oilseed above US$12 a bushel, the highest in six years. Soybean oil prices also reached the highest level since 2014, while meal futures are at a four-year high.
Prices have gained on speculation traders will need to turn to US suppliers to meet their contract needs. Brazil has sold most of its soybeans to China and therefore can’t make up for the shortfall in Argentina. Workers were due to discuss their demands again at a summit on Thursday.
Bunge Ltd declined to comment on how it’s meeting its demand from customers, while Cofco International Ltd couldn’t immediately comment on the matter. Archer-Daniels-Midland Co and Cargill Inc didn’t return emails seeking comment.
The strikes could at some point end up affecting wheat supplies to Brazil, which imports the majority of its needs from its neighbour. For now, Brazilian millers are well supplied as the nation has just reaped its domestic crop and only a few mills import Argentine wheat this time of the year, according to Rubens Barbosa, head of industry group Abitrigo.
“If the strike isn’t solved in the coming weeks, some mills could be affected,” Barbosa said in a telephone interview.
Brazil can also import 750,000 tons of wheat free of duty from nations outside the Mercosur bloc through November, Barbosa added. The alternatives to the Argentine grain are usually the United States, Russia and Canada.
by Jorgelina do Rosario, Bloomberg7