Argentina's truckers have called an indefinite strike to demand higher pay rates, parking their rigs in protest just as exporters were counting on them to haul freshly harvested soybeans to port.
Grains powerhouse Argentina is the world's No. 1 supplier of soyoil, a feedstock for the booming international biofuels sector. It is also a top soybean and corn exporter.
Most of country's crops are trucked from the Pampas farm belt to the export terminals and processing plants that dot Argentina's rivers. But shipping hubs such as Rosario and Bahia Blanca were free on Monday of the usual sound of industrial-sized rigs rumbling in with tonnes of soy, corn and wheat destined for Europe, Africa, the Middle East and China.
The FETRA group of trucking companies said the government had failed to ensure the implementation of a guaranteed minimum hauling tariff that was agreed to after a strike in October. "The government has not kept any of its promises," FETRA said in a statement.
Union leaders and government officials made little progress towards resolving the dispute. "The strike continues ... there wasn't any deal due to a lack of satisfactory proposals," a spokesman said.
No further talks were scheduled.
MARKET, FINANCIAL IMPLICATIONS
A long work stoppage could have global market implications and dent Argentina's finances. Export taxes on soy and related products account for about 5 percent of state revenue. Strikes are watched by grains traders and bondholders alike. Cargill, Bunge, Molinos Rio de la Plata , Noble and Louis Dreyfus are among the grains exporters that operate in Argentina.
The government expects the 2011/12 soy harvest, which began this month, to come in at 43.5 million to 45 million tonnes. The corn crop, which started being collected last month, is forecast by the government at 21 to 22 million tonnes. Labor disruptions are common in Argentina, where inflation, estimated by private economists at between 20 and 25 percent annually, has made wage and tariff negotiations increasingly tough in recent years.
The truckers' strike comes at a difficult time for farmers recovering from a December-January drought that reduced crop yields and for President Cristina Fernandez. Fernandez, 59, has enjoyed support among labor groups, but Europe's financial crisis and slower demand from key client China have forced the president to reduce some of the subsidies and social spending that helped set the stage for her 2011 re-election landslide.
Her popularity has sunk as the economy, which boomed during most of her first term, comes down to earth. Business leaders chide Fernandez for state-centric policies, such as the high soy export taxes and heavy foreign trade controls imposed by her government. In 2008, she ordered the state takeover of the private pension system.
Farmers say such measures scare away investment. But as the world population expands, global food demand is expected to double by 2050. With a farm belt bigger than the size of France, Argentina will be key to meeting that demand despite its policy uncertainty and chronic labor disruptions.