The prolongation of a workers' strike in the ports of Argentina may disrupt wheat millers' operations in Brazil, especially if the labor action is not called off before the end of the year, industry representatives were quoted in the Brazilian media.
More than one hundred cargo ships are facing delays to load agricultural products in Argentina, including wheat that Brazil imports to produce flour and by-products.
Brazilian government data disclosed on Monday showed incoming wheat volumes as dropping, a sign that the Argentine strike is taking a toll on imports. On an annual comparison, the average of Brazilian wheat and rye imports fell by half through the third week of December, to just over 14,000 tons per day, government data showed.
Brazil just finished harvesting its own wheat crop, estimated at 6.3 million tons. For a short time, internal demand will fall as millers halt factories during the holidays.
At this time of the year few buy wheat, Rubens Barbosa, president of wheat millers association Abratrigo, said by telephone on Monday. But if the strike doesn't end, some will face limited supplies.
Barbosa said he is in contact with Brazil's embassy in Buenos Aires to monitor the situation.
Brazil imported 4.3 million tons from Argentina in the year through November. U.S. and Russian traded volume rose by 92% and 159% in the period, a sign Brazil is accessing alternative suppliers.
Jonathan Pinheiro, an analyst with agribusiness consultancy Safras & Mercado, said Brazil's internal supplies face risks if the strike continues in January. A fall in Argentine imports would lead to a rise in costs for millers, which would need to resort to potentially less- competitive producers, Pinheiro said.