April 4, 2008

 

Argentine grain trade resumes after 21-day strike, prices up

 

 

Argentina traders set foot on the floor of the Rosario Grain Exchange Thursday for the first time in 21 days following a nationwide farm strike that paralyzed grain trade.

 

The strike was suspended on Wednesday for 30 days to facilitate negotiations with the government.

 

Spot soy, corn and wheat prices rose across the board as buyers scrambled to get their hands on grain after three weeks of blocked operations.

 

Farmers had been on strike since March 12, blocking roads across the country to prevent the transport of agricultural goods.

 

The strike was a protest over a sweeping overhaul of the export tax structure on grains and derivative products.

 

A sliding scale was implemented with rates increasing as export values rise. At current prices, the export tax on soy rose to 39 percent, compared with the 35 percent levy previously imposed.

 

Strong demand for corn pushed prices up sharply. Buyers rushed to secure the grain, with the 30-day suspension of the strike providing a narrow window to secure new-crop supplies, Roagro analyst Pedro Amuchastegui said.

 

Exporters declared another 3 million tonnes of corn for export over the past three weeks, bringing total new-crop corn export commitments to 8.6 million tonnes, Amuchastegui said.

 

Spot corn was traded at ARS540 (US$170.62) per tonne, up from ARS510 (US$161) on March 12, when it was last traded.

 

April 2009 corn traded at US$168.90 a ton, up from US$154.50 last Thursday.

 

Spot soy sold for ARS910 (US$288) per tonne , up from ARS850 (US$269) on March 12, when it was last traded.

May 2008 soy traded at US$284, up from US$278 last Thursday.

 

While the soy harvest started a few weeks ago, tight spot supplies continue due to the strike and it seems that farmers are continuing to withhold beans in protest, Amuchastegui said.

 

The president of the Rural Confederation, Mario Llambias, said Wednesday that the group is recommending farmers sell only the minimum amount of grain necessary and hold back the rest until they receive a fair value.

 

Spot wheat was traded at ARS580 (US$183) per tonne, up from ARS570 (US$180) on February 11, when it was last traded.

 

December/January wheat was priced at US$221.50 per tonne on Thursday, up from US$207 a week ago.

 

Argentine grain exporters will be able to start declaring wheat export commitments again next week based on the government's most recent notice to exporters.

 

The government said on March 18 that wheat exports would be opened again starting April 21.

 

Exporters can only make declarations of shipments 15 days before actually shipping the goods, so April 7 is the first day the government will accept the new contracts.