Argentina half-halted on gas oil shortage and roadblocks

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Argentine truckers blocked roads on Wednesday to protest a prolonged conflict between farmers and government, threatening to further disrupt grains exports and cause food shortages.

Truckers are pressing for a definitive agreement in the three-month dispute, which has left them without work. During their protest over a tax hike on soy shipments, farmers have refused to send goods to market and manned roadblocks.

Tensions have increased on the country's highways in recent days and gunmen shot at six fuel trucks after their drivers tried to avoid a highway blockade in the central province of Entre Rios late on Tuesday, officials said. No one was hurt.

Interior Minister Florencio Randazzo condemned the attack as "shameful" and truckers said the situation on the roads was chaotic.

"There's a lot of nervousness and it's getting harder and harder to keep calm. We're going to end up harming each other," said Hermes Ludi, a leader of truckers' federation FETAC.

Farm leaders called off their latest strike on Sunday, but negotiations with center-left administration of President Cristina Fernandez have yet to resume, raising fears of renewed protests in the country -- a top global grains exporter.

On Wednesday evening, however, government officials made good on a promise to allow more wheat exports in a move that could soothe foul tempers.

Government announced the imminent approval of 1 million tonnes of 2007/08 wheat for export, with half of that earmarked for top client Brazil. Officials said another million tonnes of stocks could be verified and eventually exported as well.

A months-long ban on wheat exports was one of several government measures that riled farmers in recent months.

Cabinet Chief Alberto Fernandez told a news conference: "We hope all (the protests) stop and Argentine people can return to their normal lives."

SHORTAGES LOOM

A food industry association called Copal warned of shortages if truckers' protest continued.

"The paralysis of our industrial activity, combined with logistical difficulties, will cause food shortages if the conflict is not solved in the following hours," the group said in a statement.

A trickle of trucks has arrived at grains ports, and only 2,000 tonnes of soybeans changed hands at the main Rosario market on Wednesday. This ended a 10-session stretch without trade due to farm strike and truckers' roadblocks.

One grains trader in Rosario said earlier in the day: "Buyers are having problems, a lot of boats are waiting to be loaded. Some soy-crushing plants have totally shut down."

In Argentina's biggest cattle market Liniers, prices jumped as buyers stocked up, fearing supplies could dry up later this week.

Argentina is the world's No. 3 soybean exporter and its top supplier of soyoil and soymeal, most of which is sold to China and European Union countries.

The prolonged conflict over the export tax hike has sent global soy prices higher, and has also pressured Argentine bonds lower and forced the central bank to prop up the peso as some Argentines rushed to swap the currency for dollars.

President Fernandez, who defends high soy export taxes as a way to fight inflation and redistribute wealth, has seen her popularity eroded by the conflict, which erupted only three months after she took office.

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