March 20, 2012 / 1:15 AM / 8 years ago

UPDATE 3-Argentine truckers strike as soy harvest starts

* Most of Argentina's grains are taken by truck to port
    * Work stoppage called just as soy, corn harvesting starts
    * Argentina the world's No. 1 exporter of soyoil, soymeal

    By Hugh Bronstein	
    BUENOS AIRES, March 19 (Reuters) - 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.	
    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.
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