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January 5, 2021

It Will Take Weeks to Recover after Port Strikes in Argentina

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

After nearly three weeks, the union representing the crushing plant workers in Argentina reached an agreement with the companies to end their three-week old strike. The grain inspector's union, Urgara, however has not agreed to end their strike with more negotiations scheduled this week.

The Minister of Labor appeared to be instrumental in bring the two sides together. During the strike, the majority of ports in Argentina were paralyzed. As a result, more than 170 vessels have been waiting as much as 40 days to load soybeans, soybean meal, corn, wheat, and other products.

Whenever they get back to loading vessels, it is going to take weeks to work through the backlog of loadings. Farmers were also prohibited from delivering their newly harvested wheat to the export terminals during the strike, so it will take a while to rebuild stocks. Argentine farmers are still holding back some of their 2019/20 soybean production as a hedge against inflation and a potential devaluation of the Argentine peso.

Additionally, there may also be concerns in the future about the water level on the Parana River similar to what happened earlier in 2020 when low water levels forced vessels to leave the ports near Rosario with less than full loads. It has been raining less than normal in northern Argentina and southern Brazil and it looks like that pattern will persist at least for a few more weeks.