Argentine bonanza in sale of wheat to hungry Soviets

In the table-flat Pampas stretching across the provinces of Santa Fe and Cordoba in north-central Argentina, wheat and corn are being harvested for the larders of the Soviet Union.

And while the grain is pouring into the holds of Russia-bound ships, the revenues are jingling in the national treasury, businessmen's cash registers, and the pockets of Argentine consumers -- helping resuscitate an economy that only recently was the despair of the hemisphere.

Hundreds of miles southeast of the Pampas granaries, in cosmopolitan Buenos Aires, the "confiterias," those quintessential Argentine citadels of coffee, pastries, and conversation, are packed.

Supermarkets, although still often closing for a leisurely Latin lunch hour, sport longer-than-ever lines at their checkout counters.

In the dark, cramped, concrete-cavern shopping street known as Calle Lavalle, stores emblazoned "todo importado" (everything imported) are introducing Argentines to the splendors of a previously unknown range of imported goods from cosmetics to television sets.

The unwitting patron of much of this windfall of prosperity appears to be the American grain embargo against the Soviet Union over its invasion of Afghanistan.

Argentina, one of the world's largest grain exporters, has snubbed the embargo and reaped the profits.

It has doubled its sales of wheat and corn to the Soviets from 2.7 million tons last year to an estimated 5 million or 6 million tons this year, according to American commodities-industry sources.

That makes Argentina the biggest single supplier helping the Soviets make up their 17 million-ton shortfall in embargoed American grain.

It evidently was prepared to furnish even more, were it not for a drought that has cut the country's export grain crop by as much as one-half.

The Argentines, moreover, are reported to be soaking the Russians with premium prices. Since the start of the US embargo on Jan. 4, the price of Argentine wheat, for example, has jumped 25 percent to more than $200 per ton -- roughly $20 per ton more than American wheat.

The Soviet grain bonanza has hardly managed to turn around the Argentine economy single-handedly, but it caps a recovery spurred by three good harvests and a new government policy of pampering its agricultural sector after years of Peronist neglect.

Generally favorable weather, increased acreage under cultivation, tax breaks for farmers, and a freer rein on crop prices have helped nearly double annual grain exports from 11 million tons a decade ago to a record 19.5 million tons last year.

Foreign trade has earned surpluses of $2 billion in each of the past two years, chiefly from commodity exports. Reserves of foreign currency now exceed

The economy of agriculture-dependent Argentina reflects the improvement. Economic growth has reversed from a negative rate of 4.1 percent in 1978 to a resurgent 8 percent last year.

Inflation -- which led the world at an annual rate of 348 percent when the military seized control from the popularly elected Peronist government in 1976, and still outstripped all other nations in 1978 at 160 percent -- declined last year to a comparatively torpid 139 percent. (The figure fell short, however, of the government goal of lowering inflation below 100 percent.)

Argentina's official position on the Afghan invasion and the Soviet grain embargo is simple: It opposes both.

This is not the first time Argentina has profited from confrontation between world superpowers. During World War II, the country reaped the riches of supplying goods to both the Allies and Axis powers while staying neutral until the closing days of the war.

But its new role as an embargo-breaking grain supplier to the Soviet Union is fraught with irony.

Argentina's military government, in its domestic policies, is fervently anticommunist. The Moscow-aligned Argentine Communist Party is "suspended" (although not banned outright, as are many other leftist political organizations).

At a time when relations with the United States have been strained by criticism from the Carter administration over Argentina's repressive record on human rights, the Soviet Union has quietly become one of the South American nation's largest trading partners.

Soviet imports from Argentina have mushroomed from just $30 million in 1972 to $567 million last year.

"What we may be seeing," says Laurence Birns, director of the Council on Hemispheric Affairs, "is one of the most eccentric alliances in history [between ] the two most opportunistic nations in the world today."