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Advisor

Watch Argentina

With a big poliitcal crisis brewing.

 

Argentina is effectively storing the world's soybean carryover as the policies of the Kirchner goverment incentivize farmers to hoard beans.

 

What comes next could go either way- more currency turmoil and no change in export duties, thus encouraging more tight holding. Or a change in policy that would make a lot more beans available to the market.

 

Luis, I know it isn't your country but you're closer to it. Any thoughts?

 

 

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Veteran Advisor

Re: Watch Argentina, the sooner Cristina is gone the Better

for All.  MO

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Contributor

Re: Watch Argentina

Hi hardnox. I hope you don't mind my reply, since you didn't ask for  it, but here it goes.

 

There's about 11M tons of soybeans still held by farmers. At current prices and with the new crop coming in by march, some sales should arise in the next weeks, leading to, between 6M and 9M tons, depends on who's speaking, in stocks being carried to the next campaing.

 

The political crisis in which we're at the moment, after the suicide/murder of prosecutor Nisman, is just more of what we're already going through. Still, it might reduce credibility for the goverment, making it even more difficult for them to hold the presidencial chair in the coming elections, that is, december.

 

Regarding the question, most local economist believe nothing is going to change from here to the elections, economically speaking. Delays in exchange rates, increasing inflation and having export duties and quotas has worked so far and, apparently, the goverment has "enough air" to make it to the election without any change in such policies.

Bottom line, we're probably facing political turmoil and no changes until december.

 

After that, of those candidates that have an actual chance of becoming president, two come from this geverment and would probably sustain export duties and quotas, while the other two could reduce them but not necessarily remove them.

In any case, all four of them would have to turn right politically speaking. How much? It depends on the candidate, but if that actually improves economical conditions and exports for Argentina, it'd be from 2016 onward.

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Advisor

Re: Watch Argentina

Thank you, and best wishes.

 

 

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