Farmers in Argentina are holding back sales in anticipation of a change in export rules that could collapse the market after the new year
Farmers in Argentina are holding back sales of soybeans and other agricultural products in anticipation of a change in export rules by the new president, who has promised to lower taxes, including abolishing the tax on grain and meat exports, which farmers have long been asking for. He also plans to abandon control over the movement of capital, which artificially supports the official exchange rate, which will lead to a sharp devaluation of the peso. However, it is not yet known when these plans will be implemented.
A sharp increase in deliveries to the world market of Argentine corn, soybeans and their processing products after the new year may collapse world prices, especially in the case of favorable weather for the new crop in the country.
In order to boost exports, the Argentine authorities have decided to extend the "soy dollar" program until December 10. Under the new scheme, traders are free to use 50% of foreign exchange earnings from exports instead of 30% as was the case earlier. The remaining 50% must be exchanged at the official rate, which currently stands at 368 pesos to $1, while the black market rate is 2.7 times higher, reaching 1,000 pesos to the dollar.
Argentina is currently in a severe economic crisis, and inflation in the country reaches 140%. President Miley promises to conduct shock therapy on the economy, including closing the country's Central Bank, abandoning the peso and cutting government spending.
The Argentine Rural Society (SRA) noted that "Argentine grain producers and livestock farmers have for years demanded the abolition of taxes and limits that limited the export of grain and meat from the country, so now is an excellent opportunity to radically change the country's agrarian policy."
Another of the country's largest agricultural associations, CONINAGRO, said that "Argentina is entering a new phase that will bring prosperity to all citizens."
