MercoPress. South Atlantic News Agency

Argentine farmers agree release grains following accord with government

The 5.7bn dollars pledged in sales by the chambers represent a 70% increase on Argentine total grain exports of 4bn dollars for the same period last year

Argentine grain exports will total US$5.7 billion in the fourth quarter of the calendar year, the CIARA and CEC chambers promised on Wednesday, after seemingly successful negotiations with the government of President Cristina Fernandez that is eager to inject much-needed export dollars into the economy.

The figures released by the chambers represent a 70% increase on total grain exports of US$4 billion for the same period last year and would — if the chambers representing a third of all of Argentina's exports are correct in their predictions — bring yearly exports five percent above 2013 figures to US$24.3 billion.

However in order to make good on the figures, the sector would need to be making harvest-level sales of around US$480 million per week until the end of the year, suggesting Argentine farmers could dip into their much-discussed hoarded stock.

The weekly figures so far this quarter — totaling US$875 million from the beginning of October until last Friday — fall far short of that goal. In fact, the weekly sales needed to reach the total would be higher than the average US$464 million registered through the year, ranging from US$966 million in the first week of May to US$108 million in the last week of January.

“Foreign currency revenue of US$5.7 billion in the fourth quarter of 2014 is feasible given the current exchange rate stability and outlook for decreasing commodity prices,” the Argentine chambers (Oil industry chamber of Argentina and Cereal Exporters Chamber) said in a press release.

The government of Cristina Fernandez (CFK) has criticized farmers for holding on to grain, warning that falling prices would make them regret their decision. Farmers, meanwhile, insist that it is the only way they have to protect themselves from inflation and a devalued peso.

At US$18.62 billion, total grain exports so far this year have fallen short of the first three quarters of 2013 when US$19.21 in export revenue had been reported.

The two chambers referred to “meetings held with officials from the Economy Ministry, Central Bank and Cabinet of Ministers Office in which detailed analysis was carried out of the potential sale of soybean on the part of producers,” as having helped lead them to their conclusions.

The CIARA and CEC predictions come amid a turbulent year in relations between Argentina's farming sector and the government, which have been loggerheads since the 2008 sector crisis over government plans to impose a system of sliding-scale export duties.

Speculation emerged this month about the intent behind two acts of vandalism on silo bags on farms, one on the outskirts of Greater Buenos Aires and another in La Pampa province, since none of the produce stored in the bags was stolen during the attacks.

Cabinet Chief Jorge Capitanich said in September that grain exporters had shown “selfish attitudes” by hoarding grains and not selling them earlier in the year when prices were higher — hurting not only their pocket books but also Central Bank coffers.

The head of the Small Farmers’ Federation (FAA) Eduardo Buzzi had acknowledged earlier this year that farmers “made a mistake by hoarding grains” and said they had “lost money for not selling earlier.”

“Instead of advising their members to act in opposition to the government, they should be encouraging the defense of the national interest,” Capitanich said in reference to the FAA policies.

But the powerful Argentine Rural Society (SRA) has said the government has tried to push the blame for the country’s economic woes on certain sectors of the economy.

“Farmers did not ask for the currency devaluation. Nobody forced the government to take the dollar from 6 to 8 pesos. They want to blame it on others,” said SRA boss Luis Miguel Etchevehere.

Argentina is the world’s biggest exporter of soybean oil (68% of the global market in 2013), soybean meal (52%) and sorghum (46%). Last year the CIARA-CEC chambers represented 37.3% of Argentina's total exports.