Argentina denounces farmer soy hoarding, says hurts state income
By Hugh Bronstein
BUENOS AIRES Jan 8 (Reuters) - Argentine growers hoarding soybeans to protect themselves from inflation are hurting both state and farm income in the world's No. 3 exporter of the oilseed, a top government official said on Thursday.
The South American country pioneered the use of plastic horizontal silos to stockpile grains. Growers are hanging onto soybeans, which are priced in U.S. dollars, as a hedge against annual inflation estimated by the government at 24 percent but seen as much higher by private economists.
"Farm groups have opportunistically begun speculating against the government by advising growers to hoard grains at the same time that prices are going down," Cabinet Chief Jorge Capitanich told a news conference. "This generates a loss of income for both the country and for growers."
The white bags that run for tens of meters and have come to dot the Pampas grains belt are sometimes ripped open by vandals. Asked about the vandalism by a reporter, Capitanich said it was a problem for local police, not the national government.
"Farmers are free to do what they want, but they are also responsible for every one of their actions," he said.
International shipments of soybeans, Argentina's main cash crop, are taxed at 35 percent, and currency controls force Argentine exporters to convert dollar income into local pesos .
So the farm sector is a key source of central bank foreign reserves used by President Cristina Fernandez to finance Latin America's ailing No. 3 economy. Repeated sovereign bond defaults and heavy-handed trade controls have pushed gross domestic product into negative territory while inflation rages.
Fernandez has been at loggerheads with the farm sector since her government was shaken by massive protests against her tax policies in 2008. The feud deepened recently when the country's main state-controlled bank cut off credit to growers found to be stockpiling soy and corn.
CBOT soybean futures have firmed to around $10 a bushel since hitting a 4-1/2 year low in October. They remain down 25 percent from the end of June, pressured by a record-large U.S. crop and prospects for big South American harvests.
The Rosario grains exchange in Argentina forecasts the country's 2014/15 soy harvest at a record 55 million tonnes. (Additional reporting by Julie Ingwersen in Chicago; Editing by Richard Lough and Meredith Mazzilli)
© Thomson Reuters 2017 All rights reserved.