May 15, 2008

Argentine grain exporters start declaring Force Majeure

Argentine grain exporters have begun to declare force majeure on shipments as farm strikes wear on, an executive at a top export company told Dow Jones Newswires Wednesday (May 14, 2008).

Some companies have not been able to comply with export commitments," the executive said. Analysts expect a wave of export contract defaults next week as grain stocks dwindle. A local news report noted that Argentinean ports only have a week's supply of grains to load onto ships.

Farmers announced a strike of at least eight days last Wednesday, after a month of negotiations with the government broke down.

The strikers, angered by a new law which increased the tax on soy exports, are focusing on shutting down grain exports with about 200 roadblocks across the country.

Just two trucks loaded with grain made it to port Tuesday, compared with more than 5,000 on the same date last year, according to the Rosario Grain Exchange.

Farmers are set to meet Thursday to decide if they will continue the blockades.