September 15, 2014
Devaluation talk keeps Argentine farmers from selling soy
Argentine farmers aren''t sellingtonnes of soythey had harvested a few months back in anticipation of an impending Argentinian peso devaluation.
Growers worry that if they sell now they could end up holding pesos with far less value than what their soy are really worth now.
Media reports estimate that about 21.5 million tonnes of soyharvested between April and June are still in the hands of farmers.The hoard represents about 7.5% of the 2013/2014 global soy output of 283.1 million tonnes.
The reserves being held from the market are estimated to be worth US$9.7 billion.
At the moment, reports say, farmers are only selling enoughto pay off pressing obligations like bank loans and taxes.
Speculations about an impending devaluation started circulating followingArgentina''s failure to pay its sovereign bond payment in July.
Many analysts consider the action by Argentine growers to hold on to their grains as a blessing in disguise.
Releasing such amount of supply into the market at this timecould further depress global soy prices, which have nearly hit four-year lows, they say.
Argentina is the world''s number three soy exporter after the US and Brazil. Its total soy harvest this year reached 53 milliontonnes, up 9.5% from the previous year, according to Argentina''s agriculture ministry.
Of these, 31.5 million tonnes-- or 57% of the harvest -- have been sold so far, ministry data shows.
At this time last year,farmers had sold about 67% of their2012/13 crop.