Argentine farm conflict squeezes agrochems

23 May 2008 22:06  [Source: ICIS news]

(Recasts for clarity)

BUENOS AIRES (ICIS news)--Argentina farmers suspended their latest strike this week amid a two-month dispute, but the possibility of renewed protests continue to put a strain on agrochemicals producers, sources said on Friday.

Farmers agreed on Wednesday to suspend their strike, but talks on Thursday between farm leaders and the Argentinean government officials failed to produce satisfactory results, according to news accounts.

Farmers oppose an increase in export taxes announced by the government on 13 March.

Roberto Coronel of the Federation of Distributors of Agricultural Raw Materials (FEDIA) said fertilizer sales in March and April were at a standstill.

High costs were also prompting farmers to consume fewer fertilizers, according to the Institute of the Economy Studies of the Argentinean Rural Society.

Some local fertilizer companies remain optimistic. Jorge Hernandez, communication manager of leading local producer Profertil said sales for his company have not suffered and products were on schedule to local consumers.

In addition, a drought is affecting the Pampa Humeda region, and also holding back the sowing. The average rainfall amount in the region was half of what it was in 2007, according to a source.

Soybean sales in March fell by 7m tonnes while corn sales fell by 2m-3m tonnes compared with the same month last year. The sown area for wheat was 14.28% less than last year. 

The biofuels sector was also potentially jeopardised by the farm conflict.

The biofuels industry is based on soy, which was not being sold to biodiesel producers amid the strike.

“Without this raw material, the biofuel industry is virtually paralysed”, said Ariel Scaparro, president of ALS Bioenergias.

However, major producers have their own crops or have soy in stock, which has allowed them to continue business as usual, said Jorge Kaloustian, president of the Argentine company Oil Fox. He added, “The main [ones] affected in the biofuels market by the farmers conflict are the small producers”.

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By: Cristina Kroll
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