Argentine grains futures market in shock: government wants operations in Pesos
Argentina could require that grains futures be listed in the local Peso currency the head of the central bank said on Friday, a move that traders said would paralyze markets in the leading global food supplier.
President Cristina Fernandez is pushing to “de-dollarize” the economy 10 years after officials ended a one-to-one peg to the dollar during a devastating crisis. A key aim is to protect the country's international reserves, used to pay debt, as the economy slows and inflation remains high.
The government has virtually banned foreign currency purchases since May, pushing the spread between the official exchange rate and the black-market rate to 40%. The ban has also battered housing sales because homes are normally paid for in the US currency.
Central bank chief Mercedes Marco del Pont told local radio the government was evaluating changes to futures contracts, whose prices are listed in dollars but ultimately paid out in pesos, to see if they could be “de-dollarized” entirely.
“At the end of a futures contract, whether it's for a commodity or a currency, the payment is in Pesos,” Marco del Pont said, adding that it did not make sense, then, for the operation to be listed in dollars.
“We're looking at other experiences in the world. In Brazil, this is done in the local currency,” Marco del Pont added.
Trade in grains futures came to a virtual halt at the Matba exchange starting on Thursday as rumours of the change began to circulate. Last year, a record 20.5 million tons of grains and oilseeds were traded on the Buenos Aires-based Matba.
The local grains futures market serves as a partial hedge against inflation estimated by private economists at between 20% and 25% a year. Widely discredited official data puts inflation at just under 10% annually.
Unlike the Chicago Board of Trade (CBOT), most futures contracts in Argentina include the delivery of physical merchandise, functioning as a forward sales market. US soy futures at the CBOT serve as their key reference for pricing.
“Farmers are not going to sell in pesos. If their debts were in Pesos, there wouldn't be a problem. But a majority of their debts are in dollars because many of their costs are in dollars” a Rosario-based trader said.
”Next week there's going to be a meeting between Marco del Pont and (officials from) the futures markets to try to find a solution that works for both sides,” the trader added.
Traders said if the contracts were to be listed in Pesos, it would be very difficult to reach agreement on their value since more and more transactions in the Argentine economy are being carried out on the basis of the black-market exchange rate.
Argentines have endured periodic economic crises that included currency devaluations, hyperinflation and deposit freezes. Since this latest round of currency controls first took effect in October, dollar deposits in banks have sunk 40%.
Earlier in the week the AFIP tax revenues agency again tightened another loophole of its “dollar clamp”. Since 20% of those who purchased dollars for tourism reasons did not travel overseas, unless they return the US currency, they will be fined and could even have the CUIT tax paying identification number suspended.
According to the tax agency, 73% of those who purchased dollars to travel said their destination was Chile, US and Brazil. But as they crosschecked data with the National Migrations Department it surfaced that 6.800 people who bought foreign currency worth 37.8 million pesos did not leave the country when they had said they would.
A communiqué released by AFIP reported that 34,500 people bought dollars in June for an amount of 184 million pesos and the main reasons for the trips were tourism (63%) and work (25%). In the case of those who said they would travel but did not do so, top destinations were Uruguay (27%), Chile (22%), US (15%) and Brazil (14 percent).
The agency announced it will ”send notifications to those contributors who did not leave the country and will inform them about the inconsistencies we found and reminding them that filing sworn statements with inaccuracies can be sanctioned with fines and with the suspension of the CUIT tax paying identification number”.
The official US dollar ended the week in Argentina trading at 4.55/4.560 Argentine Pesos, which is half a cent higher compared with the previous closing price. However on the black market the selling price of the US currency on Friday edged up three cent compared with Thursday closing price and the buying price was trading at 6.45 Pesos, confirming the spread of 40% between the two markers.
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R.I.P. Argentina....sorry, neighbors.
If you wants it, we can lend you some Piñera's boys to reconstruct your country in the shortest time possible after you send Cristinita back home to learn cooking, cleanning, ironing, etc. May be she can do those works pretty well after a hard and long trainning......At the moment she has demonstrated that there is just one task she can run fully good: to sink its own country.....!!!
You are stupid. Or weak. Or both.
Yes the system works doesnt it? Thats why after all this time and all the opportunity Argentina has it still hasnt managed to stabilize into a viable democracy and economy nor improve on the lives of millions of Argentines that live in crushing poverty.
Whats the excuse and how much more time does the peronist system need? Really, people like you are the cancer to Argentina's well being.
Argentina NEEDS resources, to trade and to have good trading relations internationally. The trick is to export as much as you import. If a country can do that then there is absolutely no need to worry about importing goods and especially resources to make goods. This is basic economics.
Even to make the humble pencil you need
lead/graphite
wood
rubber
metal
ink
Does Argentina have ALL these and if so would it be possible to produce at a reasonable price?
So you can (or maybe you cant) imagine the diversity of resources needed to make a washing machine, an electric oven, computer, medical equipment, cel phone, TV, car ETC ETC!
If you want to live a primitive hunter gatherer lifestyle and die at 40 thats fine but don't expect that everyone else should...
The system is deliberately restricting international trade to restrict the economy. Peronism requires a poor dependent majority voter base which is why Argentina never manages to progress beyond a certain level before crashing yet again. If there was a majority middleclass voter base in Argentina such as in Germany or Scandanavia etc Peronism simply wouldnt be able to exist. Simple as that.
Oh, but the world won't leave us alone. They want to force their way upon us, and we wan't nothing to do with them.
Argentines we are isolationists, we don't see any benefits from getting too involved with outsiders.
I get the feeling she is deliberately trying to get to hyperinflation and a depression. I can't think of any other reason a sane person would make these decisions!
#12 Argentine's could always buy gold, but only pesos could buy grains and meat, don't worry there is more then one way to skin a cat.
#13 because Pesos is the only legal tender that why.,
Some questions:
1) How can the supplier stand by the struck price when the posos is subject to skyrocketing inflation? He cannot, he would go out of business.
2) How can the buyer have confidence that his deal will be fulfilled? He cannot due to the obvious risks on the exchange rate. No-one but Argies are going to use the pesos for the forseeable future, the real world deals in real currencies like the US dollar.
Ahh!. I see it now, The Mad Bitch Of Argentina is going to trade in commodities: Argie soy for Angola oil (as YPF is not going to work anytime soon).
Makes perfect sense. Ha, ha, ha. :o)
And, just for the record, YOU are an isolationist and some Kirchnerites seem to be but you do not speak for 40m people. I know many, many Argentines that think the complete opposite to you. They want to be part of the world not isolated from it.
Who is forcing you to anything? Most other countries would prefer to have nothing further to do with Argentina. Isolationist? not when it comes to interfering in the affairs of her smaller nieghbours like Paraguay and Uruguay. So
1. Leave the Mercosur so that that putrescent corpse can be given a decent burial
2. Leave the G20 group of nations where you have nothing either to give or receive
3. Cut all ties wth Brazil, Chile , Venezuela and Bolivia
4.Leave the United Nations
Close all your ports tointernational shipping -you will have nothing to export or import.Likewise all international air services
5. Close all Argentine foriegn embassies -no more need for them
How bloody daft can you get?
Oh iforgot point 6 LEAVE THE FALKLAND ISLANDS ALONE
Stagflation..hyperinflation...depression
my advice... buy sugar & store in clean dry place, at least you'll be able to trade if for food when the peso collapses.
thats why they dont really care,
is this not true .
#16 are you blaming CFK for the austerity in europe?? She is a great president to us in Argentina she was even called protectionist by Europeans for her economic policy. I am confident our president is on the rights track.
#17 those Argentine's who want to be part of the world can travel if they get visas to visit lol, the world doesn't want you, didn't you get that?? Argentina let's anyone in but nobody in USA and UK want you to even have a visa, get off cloud 9 lady how blind can a wetback be.
#18 wrong !! Play again.... You must be referring to Islas Malvinas Argentina because fakland island is a corporate not a country. Www.en.wikipedia.org/wiki/Falkland_Islands_Holdings
#19 typical europids offering their unwanted advise as if anyone cared or asked, then they wonder why we consider them homos and perverts, my advise to you is quit sticking your nose in Argentina and stop killing muslim women and children in Afghanistan, iraq, Libya, syria, somalia, Sudan, and Mali. If you don't maybe you could at least stop arming terrorists in them nations. That's all.
after reading 22, you may well be correct .
Buying gold with pesos.... interesting idea....
A lot of that sounds wonderful.
All of whom are 100% are shit if you try to contact them if you have a problem with software THEY have put on our computers and WE no control over, but MUST have.
It is like nations such as Singapore and Norway who I look to: They have Sovereign funds.
My UK government failed to adapt when the Oil revenues flowed. (Using the money towards Unemployment bills and the destruction of the UK manufacturing base was preferable to them as they tackled the unions back then).
The USA, Japan and Germany looked on with glee.
Good try! Play again! Mr brutish.
www.youtube.com/watch?v=bQk5UnWgqUE
www.dailymail.co.uk/news/article-2179523/London-2012-Olympics-Fury-Welsh-Scots-snub-National-Anthem.html?ICO=most_read_module
Www.en.wikipedia.org/wiki/Great_Stink
www.wakeupamericans-spree.blogspot.ca/2008/04/london-stinks-literally.html#.UBSDZcw9l0s
www.dailymail.co.uk/news/article-2012516/Michael-Gilbert-Kept-slave-sexually-abused-finally-beheaded.html
Www.deadspin.com/5928972/the-haters-guide-to-the-2012-london-summer-olympics
www.guardian.co.uk/books/2012/jul/27/ruins-of-empire-pankaj-mishra?newsfeed=true
Modern Capitalism is no longer working. Try to learn how it went wrong and educate others.
Today you have weak labor unions, workers that expect too much from a government that only can make money by taxing, governments that overtax, and businessman who have decided that the only way to improve profit margins is to gamble everyone else's money (not theirs, they have their 'golden parachutes')...
So high taxes, weak unions, overspending governments, crony banks and business... and you wonder why Europe and the USA are in their worst economic shape in 80 years???
In the UK we have been lucky as we weren't tied to the Euro: This allowed us to print electronic money: A luxury the Greeks and Spanish don't have.
The world economic system is fucked (broken) to me, but none of our “elite” political class seem to have a solution.
From what I've learnt only 1% of the real economony actually uses banknotes and solid coins. The rest of the economy is based on electronic money.
The rest is based on promissory notes, in an electronic “never never” (Never actually pay that is) form of a promissory note.
In short, it means we people are fucked ubless we alter this bizarre system, as it is the current global form of trading system we “little people” are stuck wuck, and it's shit.
TTT very much agree with your comment; high taxes means less money in the private sector and thus less new jobs. Overspending government means higher cost for the private sector to borrow money, thus less investment. Crony banks and business, that is a cause of BIG government creating a economic system that prevents small business from competing and allows the old big companies to become inneficient. Such is the case of the USA car industry; ever wonder why no new car companies open up there? As for unions, everyone has the right to setup a union, but not to use the law (government) to achieve their goals. Don't like the job you are at, as for a change or leave and get another; simple as that. But yeah, the USA and EU are screwed if they don't get their taxing and spending in check.
To Tobias and BAMBk, but mainly TTT:
Appologies for all my typos and a big thanks to Tobias for his contribution, I think we are “pea's in a pod” on the view of the crap world trading system we have, except I'm not isoiationationalist on this like him, but the opposite! Humans talking together will rid of the “elitist” political system all nations have allowed to happen, By default, simply as it did work at the beginning:. Once you get 6-8 Microsoft's within your own nation then you start to question it. (both corporate and national monopolies.)
Oh dear, this Londoner is pissed: does this make sense?
(It's 5.30am in London am I'm pissed)- oops, drunk that means.
You two need a conversation on how the local economy works.
Banknotes are promissory notes.
[CFK] she will sink or swim.
its that simple.
Hard currencies exists and are actually beneficial to developing countries, if the romans have had recourse to a foreign currency they would have lasted a lot longer. They didn´t, but countries in the world today do have that option.
Futures, stock markets, bank notes and securities are important for economic activity, hundreds of thousands of important projects, public works like water reservoirs, hydropower works, bridges, highways, ports and many other important infrastructure projects are carried out today in the world thanks to stock markets, to securitization, thanks to futures and the ability to diversify the risk. This risk has to be take on serious premises, o currencies based on real inflation data, on sound monetary policy conducted by economists and experts, not by ideologists and crooked politicians whose main objectives are the next electoral battle.
And by the way, the US and EU no not have the crisis, the US economy is fighting for growth with industrial expansion, and its industry is resilient and its economy is growing, albeit slowly, but their banks are not in crisis anymore, precisely because they diversified the risk in their stock markets long ago.
Where I live we have full employment and are desperate to fill jobs the city's population has been growing 3% for the last 5 years! From my rooftop I can see 23 cranes used for building 10+ story buildings. It is kind of insane with all of the new construction but it should be amazing in the next 3-5 yrs.
you said @11
-Oh, but the world won't leave us alone. They want to force their way upon us, and we wan't nothing to do with them.
-Argentines we are isolationists, we don't see any benefits from getting too involved with outsiders-
If I may:
- the world isnt forcing itself on Argentina anymore than it forces itself on any other countries in the world. Seems like weakness and victim complex.
- you are not the spokesman for Argentina.
- You want Argentina to have NOTHING to do with the outside world and yet -WE don't see any benefits from getting TOO involved with outsiders- suggests you still want Argentina to have SOMETHING to do with the outside world. 'Buy what we are selling but we wont buy what you are selling' seems to be the jist of it.
Then you said @32
-Mercantilism is where people trade freely (trully freely, no restrictions, no currency manipulations, no subsidies)- Sounds good to me. Sounds like democracy in action
So are you advocating protectionism and isolationism or free trade?
Bizarre.
He would dig a 6ft wide trench around himself, and just sit their,
He wants to be left alone, but still requires others to feed water and clothe him.
.
What history were you taught???
First of all Rome as an uninterrupted entity lasted 1000 years, that's not long enough for you?
Second, the roman currency was the world's reserve currency of the time. Everyone, from the Gauls to the Iberians, the ancient Britons to the Germans, the Greeks, Egyptians and others, wanted to be paid in Roman coinage. Up until ad 220, when chronic debasing of the metals began...
@41
You are out of your mind, the US is not coming back for a long time.
@42
Free trade and political, cultural, and geographic isolationism. Barter for the goods we need, but be no one's ally, have no exchange of culture with other countries, and limit the foreigners living in the country and deport all illegals.
I'm not sure about one thing. Are you suggesting that the majority of Argentines want to go it alone like you propose or is this just what you want?
Institutions keep using old formulas to come up with economic statistics, like energy consumption statistics, or trade, for example. While these formulas still hold good for countries like China, Brazil, Russia, Mexico or Argentina, some economists are beginning to question the validity of using the same formula for the US economy, the most diverse, complex and globalized economy in the world.
The US exports many things that can be accounted for as economic activity, but every time somebody buys a McDonald burger in Mexico or China, they are also paying for an america service, and part of that money, a very small percentage if you will, goes back to the US. Services can be exported just the same as manufactured products, but traditional economic formulas to measure a country´s economic growth do not add them up, maybe it is nearly impossible, however they count, and a lot. Every time someone in Chile, Peru or Malaysia subscribes to HBO or Cinemax, or goes to the movies to watch an american film, they are impacting the american economy one way or another, and one single movie like Batman Rises can register hundreds of millions in revenues than many latin american corporations will ever dream of. Perhaps one day they will start measuring all these data and I cannot even wonder what the numbers will look like then.
What I want, but also a very strong sentiment amongst many in the country. We have always been inward looking, ignoring the rest of Latin America as we famously are accused of doing, ignoring Asia and Africa certainly, not making any efforts to be friends with North America... the only area historically we looked to was Europe, but given they are enemies now that's well over.
So who's left? Yo yes, many in Argentina are not interested in anything foreign.
I've looked with massive interest on this board but realised their are two few posters from other nations: it's mainly us Brits and Argentines.
@42 Tobers:
State Capitalism seems a semi-form of protective trading. The USA has done it for years, the British did it before them in the Empire era then went lassez-faire.
Norway, Singapore, Switzerland, France and Russia are all other examples of nations following this. To me it's a good model as it protects jobs and allows trade.
Anyway. Is there any Argentinian on this board who can explain why their politicians behave the way they do?
They seem to be born two centuries before the people they serve. The political class seems to be in a weird time-warp of colonialism. Are they very isolated compared to the rest of Argentinian society?
Inward looking= self-centred.
Being on the Internet (like you are right now)= supporting businesses in several countries other than Argentina.
Being on Mercopress (like you are right now) = supporting a business not in Argentina.
Discussing these issues with the pro-Falkland Islanders (like you are right now) = having something to do with several countries other than Argentina.
Perhaps you are right in what you say about my internet usage, but think of it as killing life to live yourself. I do not kill a mosquito, but I still kill if I intend to eat, that is the only type of killing I would ever commit.
Same here, to defend Argentina from the lying scumbags that propagate absurd canard and scurril someone has to dish the same venom back, and that's me.
Fair enough on the first few points but as for dishing the same venom back; you're not doing a very effective job. Your fanaticism destroys your credibility. It's a shame because I used to like your posts; they were well researched, fair and pretty well written. Now I like them out of curiosity because I wonder how much further your bitterness and emotion will drive you to lash out. You have to remember that we're mostly individuals, on both sides, not organised teams. People seem to go after you a bit but that's not because they have their backs to the wall defending themselves against you. It's because they are taking great pleasure from winding you up; that's all.
#36 homosexual looking for brits and perverts again, wrong blogs move on pervert, try london.
#40 you know investing in gold rather then dollars could be quite lucrative if you catch my drift, I also think the black market in Argentine could be eradicated if the police bought and busted dealers for trading, just like they do with drug dealers in USA. Imagine the wealth waitingnfor the government in our own streets of Bs.As. It's Argentina you can buy with pesos. Don't be lazy get off the couch and go out buy them. Inmediately, or you can go back to what ever country's money you have and spend it there, Simple.
#42 and #43 why don't you too thik skull homosexuals go play somewhere you are welcome, we hear Afghanistan, Iraq, Libya, syria, Yemen, somalia, Kenya, mali and Sudan needs your help cleaning up the weapons you gives terrorists to kill muslim women and Children, there was 4 bombs this morning, One in afghanistan another in Iraq the other in Yemen and syria beside the mass execution later on in mali. With friend like US and Europeans who needs enemies?? Isolation is better then letting all the terrorists in. Peru executed two americans and thats just for starters.
Oh no, don't flatter me so much. The haters don't write to wind me up, they did that before I arrived, they did that during my first “educated” stage, they do it now.
I stopped being rational and objective, eloquent in language and careful to check my spelling, because you can't serve Fois Gras to hyenas... just doesn't work.
As the Germans would say “Angriff ist die beste Verteidigung”
Surely you don't put Fois GRAS on a podium. I think it's incredibly cruel and should be banned along with shark fin soup. Apart from that I take your point but there are “hyenas” on both sides of the fence (look no further than Pirat-Hunter and Conquerer). I know you've given a few on your side a piece of your mind before but don't assume that because some of us sit back and let things go unchallenged from our respective sides it means we support those people. In my case I try not to encourage them by acknowledging them. At times they get to me and I have a go but generally I try to ignore them.
Black markets are the canary in the coal mine of economies, they tell you when things have gone wrong, and it is usually too late to do anything. Argentina has put aside realistic economic policies in favor of defensive positions like restricting the dollar exchange, or obligating car makers to export crops, or protectionist policies, or double taxation agreements with other countries. Now the authorities are chasing after people trading dollars in the streets, as if they were criminals.
The economy is excluded from world financial markets and access to credits, that is bad enough and CFK would like to make everyone believe they know what they are doing, but they are in uncharted territory and the difference between the official and the blue dollar only shows that the genie has come out of the bottle and they could not stop it.
“demand for Argentine products will sky rocket”
Not if they're not for sale they won't, If you insist on Pesos for everything then guess what, everyone will spend their dollars, euros and pounds elsewhere. No matter how much you puff yourselves up the fact is that you're a relatively small fish as far as any commodities, services and products go. The world can do without Argentina but can Argentina do without the world?*
* and yes I know the answer is obvious, it was a rhetorical question, as everyone knows (youself included) the answer to it is no.
You used to make reasoned, interesting and lucid posts but they are now often irrational. As a Brit I'd say you need to get a “check up from the neck up”. I'm sure I'm not the only concerned poster mate, please: We like you.
@Pirate-Hunter
Do you ever have anything to say?
Can't you reproduce or at least do something productive.
I talk shit when I'm pissed (drunk), you hiowever seem to be able to do it with a cup of tea in your hand,
Will you ever actually say anything of use or of interest to the Internet community?
You are also one of the posters I enjoy reading. I think that me, as a real Toby, is concerned with him, mockery earns no Brownie-points as the girls will say.
I've never puffed a cigarette, can't stand any sort of smoke in my mouth.
But we now all know what you've been up to. :)
Why why why,
Is it true you were turned down by one, and now paint every one with the same brush?
If you like guys, then rather than the insults on here, why don’t you find one one and try again,
And stop being childish.
.
Argentine$=demand vs supply
Demand for Argentine peso in a dollar economy = 0
demand for Argentine pesos in a peso economy = demand vs supply + (national bank + parliament economic policy)
Knowing some basics can save you a lot of arguments. I don't think the grain traders should have a monopoly on US dollars much needed for international bank creditors. What do we do pay banks or let the traders play???
then go somewhere else, where it is cheaper,
I think that is the way they want it to work, unfortunately for stupid CKF and her minions, fighting the laws of supply/demand is like fighting the law of gravity both will make you end up on your as* in the end.
BTW current demand price for U$ is $6,5
I wonder what will happen first Patacones or 10/1 peso? Any bets?
I insist, if your country can wait for it, on middle March 2014 when Piñear will be replaced for a new Alianza runnerup at the Office, we can send him to BA to rescue you from the bottom of the trash container....Of course its a joke, almost...
But, seriously now, don´t be too blind, deaf and dumb, with a big country so rich both in people and natural resources you deserve another destiny different which you are now suffering.....but it's no for free. You must pay for it....you must change your custom, paying your taxes, controlling the state expenditure, forgetting the state subsidies, limiting the unions power and mainly changing yourcorrupt and negligent political authorities from the Peronist Party and opening your economy to the world....Be samrt, change your mind, change your Officers....If not, unfortunatelly R.I.P. Argentina....
If you are using the hippocampus of your brain that explains an awful lot about your behaviour.
I don't know what medical book you are using but I should re-read it. The hippocampus is involved principally with three areas: inhibition, memory, and spacial awareness.
I prefer to use the reasoning part of my brain when thinking out problems, not the control (or not) of my emotions.
Argentine$=demand vs supply
Demand for Argentine peso in a dollar economy = 0
demand for Argentine pesos in a peso economy = demand vs supply + (national bank + parliament economic policy)
Knowing some basics can save you a lot of arguments. I don't think the grain traders should have a monopoly on US dollars much needed for international bank creditors. What do we do pay banks or let the traders play???
#70 if you use reason how come your Grey matter has no answers or solutions but only attacks or personal insults?? Seems like your theory is bogus and self serving. If you support US dollars as legal tender we invite you to go a head and move to USA ASAP. We support your choice and allow for people to travel if they get a visa and proper documents.
Pirate Hunter, please stop combining your support for Cristina, which is good, with your extreme homophobia of which I can assure you she wouldn't approve
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