Argentina's Port Strike: More Signs of South American Dysfunction

Strikes and poor infrastructure force Chinese to cancel soy purchases

Argentine port workers have just ended their strike, which paralyzed export operations in the heart of the South American country's Ag export centers, according to  With inflation unofficially estimated at up to 25% in Argentina, workers launched the work stoppage to try to claw back some purchasing power.  But authorities and union officials appear to have come to an agreement, which awaits only approval of union rank and file.

The strike came not long after Brazil rammed through its port privatization plan, in an attempt to rise a bit in a world ranking of port infrastructure quality.

Meanwhile, at least 50 ships were reported backed up at the Port of Rosario, Argentina. Moving an estimated 80% of Argentina's soy and corn exports, Rosario is that country's top port for ag, and a strike among workers has put the brakes on activities there—along with strikes at the Ports of San Lorenzo and San Martin, where Cargill, Dreyfus and Bunge have their own terminals.

Why? Port workers want better pay.

More on Brazil Infrastructure: Brazil's Highways are the Country's Achilles' Heel

By Tuesday last week, the Somu maritime workers' union of San Lorenzo rejected binding arbitration and opted to continue with the strike. Among their demands, port workers complained of layoffs as a result of a 60% reduction in imports. Meanwhile, estimated costs of as much as $20,000 per day, per vessel, were mounting while ships remained at anchor.

By Thursday last week, the country's farmers had brought in an estimated 93% of the 48.5 million-tonne Argentine soybean crop, with just about 3.2 million acres left to go, according to the Buenos Aires Grains Exchange. And they've still got about half of the estimated 13.7 million-tonne corn crop out in the field.

Port strikes in Brazil at the height of the soybean harvest combined with already-insufficient infrastructure to bring about the cancellation of big Chinese soybean orders.

But as long as the two countries rely so heavily on Ag exports to make ends meet, they will likely remain vulnerable to work actions like those they have been dealing with in 2012-13. A difference is that, when push came to shove, Brazil's congress dug down and found a way to address its long-term port infrastructure problems through privatization.

The Argentines, on the other hand, haven't done much I can see to put a cap on the inflation that is eating away at worker paychecks.

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