Grain inspectors strike likely to impact Argentina’s soybean, corn trade

The indefinite strike called by the Argentinian grain inspectors union March 30 is expected to severely curtail Argentina’s soybean and corn trade, just as the harvest season begins, sources and market analysts told S&P Global Commodity Insights, likely tightening supplies.

URGARA, a union that represents grain inspectors, had announced the strike demanding higher wages to counter inflation.

The Argentinian economy has been battling hyperinflation in recent years, which has led to many wage-related strikes over the period by different labor unions in the country, the analysts said.

By the end of February, the country’s inflation rate was estimated at 102.5%, way above the hyperinflation threshold of 50%.

The strike comes at a crucial period for the Argentinian farmers as they ready themselves for the new harvest season starting April 1.

The most severe drought in over 100 years — over October 2022 to early March — has already reduced the country’s production prospects significantly in the marketing year 2022-23 (April 2023-March 2024).

The Buenos Aires Grains Exchange projected soybean harvest at 25 million mt in MY 2022-23, down 50% on early season estimates. Corn output for the same period is seen at 36 million mt, down 35% on pre-season expectations.

Argentina is the world’s top exporter of soybean oil and meal, and the third-largest shipper of raw soybeans and corn.

The basis prices have also been rising amid supply concerns due to the grain inspectors union strike.

Platts assessed soybean meal Argentina FOB Up River for May deliveries at $514.66/mt March 30, up $1.87/mt on the day, showed S&P Global data.

Tags: corn, trade, soybean, inflation, output, Argentina, estimates