China is looking for alternative sources for the purchase of soy since Argentina is rapidly becoming a non reliable supplier, according to the Financial Times.
The decision is based on the ongoing farmers-government conflict over export levies which is no closer of reaching a solution than when it was triggered last March 11 with the increase in levies on grains and oil seeds to the tune of almost 45%. The latest chapter of the conflict this week has again meant non operational export markets for grains, oil seed and beef. More volatility can be expected from the sector "which will impact on higher food prices and the supply crisis", says the renowned British financial newspaper. One of the leading articles of its Thursday edition the Financial Times underlines the economic dangers that the current situation entails for Argentina which is the world's third exporter of soy, second of corn and sixth of wheat. The Argentine government insists that the export levies are essential for its income distribution policies in a country where al least 20%, --but closer to 30% according to private economists--, live below the poverty line, writes the Buenos Aires correspondent Jude Webber. With negotiations suspended there are growing expectations that the government might unilaterally announce modifications to the export levies system, which will most probably retain the basic scheme. If this is the case, "farmers will interpret this last government action as a slap in the face", according to Webber.