Argentina coronavirus cases throw wrench in global soy trade
Crop giant Argentina has reported its first cases of the coronavirus at port terminals that ship soybean products to the world in a fresh blow to the global commodities trade already disrupted by the pandemic.
China's Cofco International and U.S. agribusiness firm Bunge Ltd. were both forced to idle port terminals and soybean crush plants north of Rosario on the Parana River, Argentina's hub for shipments of soy meal for livestock feed and soy oil for cooking and biofuel. Local shipper Vicentin SAIC also had its operations disrupted after employees tested positive.
The confirmation of cases in Argentina's key export industry is a kick in the teeth for President Alberto Fernandez, who put in place a strict lockdown in March and has only just started to soften it in the Buenos Aires metropolitan area even as the virus curve refuses to flatten.
"We are expecting that at some point we'll start to get cases," said Ernesto Torres, a spokesman for an oilseed-crush union that represents 7,000 workers at plants and ports outside the northern-Rosario hub, where there haven't yet been infections. "It's inevitable."
Cofco has halted work at an oilseed crushing plant and port facility after 12 workers tested positive for Covid-19. Bunge stopped operations on Saturday at a similar facility nearby after one employee tested positive. A Vicentin bottling plant in the vicinity is also temporarily out-of-action after reporting a case.
Argentina is the top exporter of soybean products. For now, traders aren't too concerned about disruptions as the number of cases is small, Argentine farmers aren't selling and Covid-19 has hurt demand for products like soybean oil, widely used by restaurants. That could change if the shutdowns are prolonged.
"If the Covid-19 thing doesn't cut into demand to offset it, then the products will be tighter worldwide," said Bevan Everett, a risk management consultant and grains market analyst at brokerage StoneX.
Cofco's Timbues plant could be shut for a week and the company is redirecting cargoes to its Puerto General San Martin terminal and facilities run by other companies, according to a company spokesman. Cofco doesn't expect big delays in delivering to buyers.
After stopping operations at its Puerto General San Martin facility, Bunge is also sending trucks to its other terminals, a spokeswoman said. Vicentin will shut one shift at its Renopack bottling plant for 10 days, but hopes to have the other shift up and running by Wednesday, according to a spokesman.
"Employees who had close contact with the infected person were isolated and tested and the results were negative," Bunge said in an emailed statement, adding that the company has "strictly followed all health and safety protocols determined by authorities."
Farming, oilseed crushing and crop exports were exempted from the lockdown. But there were still disruptions as powerful union bosses and town mayors moved to ensure their members and constituents would be as safe as possible.
A worker at Renova SA, a partnership between Vicentin and the agriculture unit of Switzerland-based Glencore Plc, tested positive earlier in the year but was quickly isolated and no more cases have been reported at Renova's two plants in the same area north of Rosario, Vicentin's spokesman said.
Sixty workers from plant-port facilities around Rosario are currently in self-isolation, said Gustavo Idigoras, head of Argentina's crop export and crush group Ciara-Cec, whose members include the global agribusiness giants. Companies are beefing up protocols with the virus spreading in nearby communities, Idigoras said.
Rosario is in Santa Fe province, whose government has also taken more stringent measures because of a recent spike in cases.