May 21, 2015 / 4:59 PM / 3 years ago

Argentine soybean market paralyzed as exporters demand solution to strikes

BUENOS AIRES, May 21 (Reuters) - The soy market in Argentina’s pivotal grains hub was virtually paralyzed for the fourth day on Thursday as most exporters refrained from purchases in a bid to pressure the government to resolve a nearly three-week long strike among crushing workers.

The strike by the opposition-allied Industrial Oilseed Complex Workers Federation in the southern districts of the Rosario port has slowed the loading of vessels and comes in the middle of the Southern Hemisphere harvest season for exporters in the world’s leading supplier of soymeal and soyoil.

Leaders of the federation, which accounts overall for 20 percent of grains crushers, will meet employers for wage talks mediated by the government later on Thursday.

“The message coming informally from exporters is that purchases will be minimal until the government takes real action on the topic of the crushers’ strikes,” a grains broker who deals daily with export firms said.

Crushers in the northern San Lorenzo district, who are affiliated with more pro-government unions, have carried on working, although exporters running those milling plants are refusing to buy new soy and instead are using deliveries from recent purchases and stocks.

Grain companies whose milling plants and terminals are directly affected by the strike include Cargill and Louis Dreyfus, though exports so far have been unaffected.

“The other companies are joining in out of solidarity, it’s a way of adding pressure to talks,” a trader in Rosario said.

Tough pay negotiations are common in Argentina, as workers negotiate wages in line with one of the world’s highest inflation rates.

Executives at foreign energy firms this week said labor disputes were on the rise and costing them millions of dollars as they explore the country’s vast but barely-tapped Vaca Muerta shale oil and gas field.

While the government estimates annual inflation in the stagnating economy at around 15.8 percent, private economists say it is more than 25 percent.

Two powerful trade unions reached a deal on Tuesday with the government for a roughly 27 percent salary hike for workers.

The Rosario grains hub has faced a further obstacle this week of a vessel that ran aground and has been blocking shipping on the main waterway. (Writing by Sarah Marsh; Editing by Alan Crosby)

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