Argentine farmers are holding back sales in anticipation of changes in export rules, which could collapse the market after the new year

Argentine farmers are holding back sales of soybeans and other agricultural products in anticipation of changes in export rules by the new president, who has promised to cut taxes, including abolishing the tax on grain and meat exports, which farmers have long asked for. He also plans to abandon capital controls that artificially support 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 the supply of Argentine corn, soybeans and processed products to the global market after the new year could bring down world prices, especially if the weather in the country is favorable for the new harvest.

In order to boost exports, the Argentine authorities decided to extend the soybean dollar program until December 10. According to the new scheme, traders can freely use 50% of foreign exchange earnings from exports, not 30% as it was before. The remaining 50% must be exchanged at the official rate, which is currently 368 pesos per dollar, while the black market rate is 2.7 times higher and reaches 1000 pesos per dollar.

Argentina is currently in a severe economic crisis, with inflation reaching 140%. President Milei promises to conduct shock therapy for 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 been demanding for years the abolition of taxes and limits that restricted grain and meat exports from the country, so now there is a great opportunity to radically change the country’s agricultural policy.”

Another of the country’s largest agricultural associations, CONINAGRO, said that “Argentina is in a new phase that will bring prosperity to all citizens.”

Tags: grain, soybean, Argentina, export