Cordonnier: Argentine Farmers Hold Grain Amid Economic Turmoil

February 5, 2014 04:09 AM
 

 

 

South American crop consultant Dr. Michael Cordonnier says economic turmoil in Argentine has forced many farmers to hold off selling any more of last year's crop, as they view the grain as a hedge against inflation that is estimated at 30% and climbing. He believes farmers are still holding around 8 MMT of last year's soybean and 9 MMT of last year's wheat crops.

"In the wake of the recent devaluation of the Argentine peso, farmers are going to hold onto their grain until they feel the devaluation process has run its course. Over the last two weeks, the government has allowed a partial devaluation of the currency, but most observers feel there is still the possibility of further devaluations," says Dr. Cordonnier. "Until that process is complete, farmers are going to be very reluctant sellers."

Dr. Cordonnier says once new-crop harvest reaches full swing in March, farmers will be forced to make sales to generate cash flow. Meanwhile, the government is desperate for additional revenues and rumors are swirling it will try to force farmers to sell grain by implementing levy fines on farmers, creating a national purchasing bureau or increasing the export tax.

"The government is running out of hard currency and basically agricultural exports are the principal way for hard currency to flow into the country. If any of these measures are instituted, the farmers in Argentina are certain to stage mass protests similar to several years ago when they forced the government to back away from a proposal to greatly increase the export taxes," he says.


 

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Comments

 
Spell Check

Anonymous
2/5/2014 12:26 PM
 

  go argentinian farmers. good luck.

 
 

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