Saturday, May 10

Argentine farmers announce fresh action

Remember what I said before about Argentina heading into economic problems? The problems for Argentina and rest of the world just went worse. I quote from the FT>

Argentine farmers yesterday announced a return to their roadblocks just over a month after a crippling 21-day strike sparked by a rise in export tariffs, causing an immediate spike in international grain prices.

News of another strike in Argentina, the world's third-biggest exporter of soyabeans and biggest of soya oil, immediately pushed soyabean futures up 2.5 per cent in Chicago to $12.96 a bushel.

Analysts say anything more than a few days of action by Argentine farmers, combined with strong buying by China ahead of the Olympic Games, would be enough to send prices back to record levels, as happened during the earlier Argentine farm strike in March.

The impact of the farm turmoil could also be more far-reaching: despite record world prices, Argentine farmers are already cutting back on wheat planting by up to 15 per cent this season because of the impact of tariffs and the government's decision to periodically close exports in a bid to keep domestic prices low.

There will be trouble ahead....

Only hope is that the WTO takes a stance on this very quickly, no other body has the governance or the authority to step in because individual country action will make matters worse.

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