World Grain - August 2019 - 16

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ARGENTINA
Grain and oilseed industries buffeted
by changing government policy,
currency devaluation
by Chris Lyddon

Argentina is one of the world's largest exporters of grains and
oilseeds but those industries have been buffeted by factors outside agriculture, notably changing government policy, currency
devaluation, and the U.S.-China trade dispute that is shifting the
direction of its exports.
In an annual grains report dated April 25, the U.S. Department
of Agriculture (USDA) attaché said that a peso devaluation in
2018 means that production costs, particularly those denominated in local currency, will be lower.
"Farmers will have access to quality seed from last year and
new wheat varieties that are high-yielding and in strong demand
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The imposition of a four peso per dollar export tax on grain in
September 2018 meant that exporters had to absorb an additional
9.3% cost, which is passed back to the farmer.
"Argentine grain producers, keenly aware of the impact of government policies on their bottom line, will be monitoring the upcoming
presidential elections in October 2019 and incorporating potential
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The country's total grains production in 2019-20
will be 81.9 million tonnes, up from the 79.4
million forecast a month earlier, according to the International Grains Council's (IGC) June 27 Grain Market
Report. The previous year's output was 83.9 million tonnes.
The IGC's forecast for Argentina's 2019-20 wheat
production is 19.7 million
tonnes, which has not been
revised since last month and
compares with 19.5 million
the previous year.
Argentina's 2019-20 maize
production is put at 55.3 million tonnes, up from the previous year's estimate of 52.8 million, but down from the 57 million
produced in 2018-19.
16

KEY FACTS
Capital: Buenos Aires
Population: 44,694,198 (July 2018 est.)
Religions: Nominally Roman Catholic 92% (less
than 20% practicing), Protestant 2%, Jewish 2%,
other 4%.
Location: Southern South America, bordering the
South Atlantic Ocean, between Chile and Uruguay.
Government: Presidential republic. Chief of state
and head of government: President Mauricio Macri
(since Dec. 10, 2015).
Economy: Argentina benefits from rich natural resources, a highly literate population, an export-oriented agricultural sector, and a diversified industrial base.
Although one of the world's wealthiest countries 100
years ago, Argentina suffered during most of the 20th
century from recurring economic crises, persistent fiscal and current account deficits, high inflation, and
mounting external debt. Cristina Fernández de Kirchner
succeeded her husband as president in late 2007, and
in 2008 the rapid economic growth of previous years
slowed sharply as government policies held back exports
and the world economy fell into recession. In 2010 the
economy rebounded strongly, but slowed in late 2011
even as the government continued to rely on expansionary fiscal and monetary policies, which kept inflation in
the double digits. To deal with these problems, the
government expanded state intervention in the economy: it nationalized the oil company YPF from Spain's
Repsol, expanded measures to restrict imports, and
further tightened currency controls to bolster foreign
reserves and stem capital flight. Between 2011 and
2013, Central Bank foreign reserves dropped $21.3
billion from a high of $52.7 billion. In 2014, Argentina and China agreed on an $11 billion currency swap;
the Argentine Central Bank has received the equivalent of $3.2 billion in Chinese yuan, which it counts as
international reserves. With the election of President
Mauricio Macri in November 2015, Argentina began
a historic political and economic transformation, as
his administration took steps to liberalize the Argentine economy, lifting capital controls, floating the
peso, removing export controls on some commodities, cutting some energy subsidies, and reforming
the country's official statistics. Argentina negotiated
debt payments with holdout bond creditors, continued working with the IMF to shore up its finances,
and returned to international capital markets in April
2016. In 2017, Argentina's economy emerged from
recession with GDP growth of nearly 3%.
GDP per capita: $20,900 (2017 est.); inflation 25.7%
(2017 est.); unemployment 8.4% (2017 est.)
Currency: Argentine pesos (ARS): 42.6 pesos equal 1
U.S. dollar (July 23, 2019).
Exports: $58.45 billion (2017 est.): soybeans and
derivatives, petroleum and gas, vehicles, corn, wheat
Imports: $63.97 billion (2017 est.): machinery,
motor vehicles, petroleum and natural gas, organic
chemicals, plastics.
Major crops/Agricultural products: sunflower
seeds, lemons, soybeans, grapes, corn, tobacco, peanuts, tea, wheat; livestock.
Agriculture: 10.8% (2017 est.) of GDP and 5.3%
of the labor force.
Internet: Code: .ar; 30,786,889 (July 2016 est.) users.
Source: CIA World Fact Book

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