BUENOS AIRES, Argentina (Reuters) — A spike in shipping costs and lower profits resulting from a series of union protests at Argentina’s Rosario port, one of the world’s biggest grain export centres, has raised concerns among the country’s agricultural companies.
Strikes by powerful unions representing river pilots, longshoremen and soybean crushing workers have been frequent at the port, about 300 kilometres north of Buenos Aires, where some of the world’s top grain traders, such as Cargill, Bunge and Louis Dreyfus, operate.
Port reliability is key to the country, which relies heavily on farm export taxes to fund government spending, since the country has been locked out of international bond markets since its massive 2002 sovereign default.
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Argentina, the world’s No. 3 corn and soybean exporter, will be counted on to help meet rising food demand as global population grows toward nine billion by 2050. So world consumers also hold a stake in the health of its ports.
Protesters have been demanding pay increases to compensate for eroding purchasing power caused by inflation in Argentina, one of the world’s highest rates, estimated by private analysts at about 25 percent.
Union protests, among other things, have blocked bean deliveries to soybean oil processing plants and help guiding ships into port.
Delays in loading ships can be costly. Docking a Panamax-sized vessel with a capacity of 65,000 tonnes of grain costs about $13,000 US to $17,000 a day, according to the Capym port industry chamber.
The port handles nearly 80 percent of the grains and derivatives shipped from Argentina, the world’s top soybean meal and oil exporter.
Up to 100 ships have been left waiting when strikes have gone on for more than a few days. Normally, 2,400 ships pass through the Rosario area each year.
Argentina harvested 49.3 million tonnes of soybeans and a record 32.1 million tonnes of corn in the 2012-13 season, far exceeding volumes a decade ago. Specialists say those numbers should continue rising in coming years.
Agriculture exporters have complained, however, that sustained growth in Argentine farm output has not been accompanied by adequate port development. And they say the problem may get worse before it gets better.
