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02/06/2006 | Diesel Lack Hinders Argentina Wheat, Soy Farmers

Reuters Staff

A shortage of diesel fuel for trucks and farm machinery is hindering wheat seedings and progress on the soybean harvest in parts of Argentina, farm and transport groups said on Wednesday.

 

Argentina, the world's No. 3 soy producer, is wrapping up the 2005/06 soy harvest, forecast at a record 40 million tonnes. Meanwhile, farmers have begun to seed the 2006/07 wheat crop in Argentina, one of the world's top five exporters.

Energy companies say the fuel shortage is due to a spike in demand, but many farmers suspect suppliers are withholding diesel to force prices higher.

"The situation is very complicated. There are problems with wheat seedings and soy gathering," said Pablo Orsolini, vice president of the Argentine Agrarian Federation, which groups together small- and medium-scale farmers.

"In Chaco province there is a nearly complete shortage. Many machines are halted and work cannot proceed because there is no fuel. In southern Buenos Aires province there are also quite a few problems," Orsolini said.

Buenos Aires is the No. 3 soy-growing province and accounts for about 60 percent of Argentina's wheat crop, which was 12.5 million tonnes last season. North-central Chaco province is the No. 5 soy grower but its wheat output is minimal.

Transport groups said fuel supplies have been spotty for the last three weeks or so.

"There was an excessive rise in demand for diesel, which outpaced supply," a source in the energy sector said, adding that oil companies are working with the government to figure out how to increase production in the coming years.

The Confederation of Rural Associations in Buenos Aires and La Pampa (CARBAP) said it was concerned about fuel supplies, adding that the farm sector is the main consumer of diesel in Argentina with demand at about 4 billion liters (1 billion gallons) each year.

Argentine television showed trucks and cars lined up to fill their tanks at gas stations in Chaco, where diesel was being rationed.

"There are supply problems in nearly the entire country; we cannot keep operating under these conditions. We are asking oil companies for a solution and asking the government to intervene," said Marcelo Mugas, executive director of the Argentine Federation of Freight Transport Entities.

Reuters (Estados Unidos)

 



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