The head of Argentina's main export chambers of commerce said that the grain trade in Argentina was basically paralyzed due to the shortage of soybeans caused by drought and farmers' expectation of adjusting the official exchange rate after the new president took office.
Last Sunday, Javier Mile, the candidate of the Argentine Far Right Election Alliance's "Freedom Forward Party", won the second round of the presidential election and was elected as the next president of Argentina. Mille will officially take office on December 10th local time.
During the election campaign, Mille proposed a series of radical political proposals, including replacing the Argentine peso with the US dollar, ending currency controls, closing the central bank, and significantly reducing government spending.
Later on Wednesday (November 22) local time, Gustavo Idigoras, head of CIARA-CEC, an Argentine crushing and export agency, said: "Today, food trade is paralyzed due to the most severe crop shortage in 60 years, and after Mile's victory, people expect the official exchange rate to adjust soon
Argentina is usually the world's largest exporter of processed soybeans and also the world's top three exporter of corn. The country is also an important exporter of wheat and beef.
Argentina is struggling with triple digit inflation and a declining exchange rate. The country has strict capital controls, with an official exchange rate of 350 Argentine pesos per dollar. However, the exchange rate on the black market is much higher, reaching a staggering 1000 Argentine pesos per dollar last month.
This harms the interests of Argentine exporters, as they often have to remit most of their overseas income domestically at official exchange rates.
Although the Argentine government has introduced exchange rate preferential policies for farmers, providing them with better exchange rates, many producers are waiting to see what Mille will do after taking office. Millay promised to lift currency controls and reduce taxes.
Argentina is experiencing the most severe drought in 60 years, with soybean, corn, and wheat all experiencing varying degrees of reduction in production.
Idigoras stated that due to a lack of soybeans, the production capacity of large crushing plants along the Parana River has significantly decreased. He quoted data as saying, "Currently, the average idle capacity of the crushing plant is 73%, and the idle capacity of the grain port is 75%. We are going through the worst year and worst quarter in history
Idigoras added that due to the inability to continue operations, the crushing plant is providing technical maintenance in advance, and there will be very few active production lines left in the coming months.
Idigoras called on the Argentine government to quickly lift trade restrictions on food, including tax and foreign exchange restrictions, as well as lift export caps and import licensing red tape.
He said, "The Millet government must become the most export-oriented government in history and adopt an active export policy. To this end, they must lift all restrictions on the first day after taking office