Argentina trucking strike stymies cattle, cash flow

BUENOS AIRES, Argentina (Reuters) -- Transport strikes in Argentina stymied the crucial cattle trade and left some automatic teller machines without cash on Tuesday, but the government said it will not bow to demands to cut fuel prices.

On Sunday the Argentine National Transport Confederation, a major player among six national truckers' groups, began an indefinite strike to pressure for cheaper diesel fuel.

The protest sharply cut the number of trucks on the road and had the usual heavy impact on the flow of cattle in Argentina, the world's fourth-largest beef exporter. The Liniers national cattle market in Buenos Aires, one of the world's largest, registered an influx of 97 animals on Tuesday versus 13,175 head a week earlier.

For the whole of last week 58,411 animals were moved through the pens, marking a high for the year. The cattle trade is one of the pillars of an agriculture sector that accounts for 20 percent of the country's $282 billion gross domestic product and 60 percent of its exports.

"The truckers strike and strong rains in various cattle zones were the cause of nearly no activity in the market," said an auctioneer.

"For now there are no signs of supply shortage as big consumers foresaw this situation last week, but if the strike goes on it will be felt around Friday," he continued.

At the country's principal fruit and vegetable market stocks had also been built up via weekend deliveries, but trouble was feared if the strike kept on.

"Today there was a 30-percent reduction in the influx of trucks compared to last Tuesday," said a vegetable market spokesman.

"Between Wednesday and Friday we're going to have a good look to see what will happen next week if the strike continues," he said.

Other trucking organizations had threatened to protest only to be dissuaded on Thursday by a government package including a cut in road tolls, tax breaks and an 11.5 percent discount on diesel negotiated with Spanish oil company Repsol-YPF.

The center-left Alliance government stayed with a hardline

stance towards the striking drivers, rejecting their action as politically motivated.

"If the proposal is to lower by six cents the price of diesel, that has a cost of $700 million (in government income)," said Economy Minister Jose Luis Machinea.

"Besides the fiscal cost, this is not a time to give way because the government cannot negotiate under pressure," Machinea said.

Argentina's government is trying hard to shave a fiscal deficit that ballooned to a record $7.1 billion in 1999. The 2000 target is $5.3 billion according to a standby loan agreement with the International Monetary Fund.

Truckers haul about 80 percent of Argentina's goods.

As if the protest by haulers of goods was not enough, armored car personnel also failed to show up for work starting on Monday, leaving numerous cash machines empty throughout capital city Buenos Aires.

Copyright 2000 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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