Argentine Crop Exports Soar $2 Billion in Three Weeks

[Bacchus4.0]

Argentina’s crop exports surged $2 billion in the last three weeks of the year after restrictions were scrapped by the new president, according to exporter group Ciara-Cec.

Farmers sold $752 million worth of grains and oil-seeds in the last three days of 2015 for an annual total of $20 billion, down 17 percent from a year earlier. Sales in the last few days of the year were almost double the amount of grains and oilseed shipped abroad in the entire month of November.

The export of grains has become more profitable for farmers after newly elected President Mauricio Macri eliminated most crop taxes and lifted four years of currency controls, leading to the biggest one-day devaluation in the last 14 years on Dec. 17. Export restrictions were implemented in the past decade under former president Nestor Kirchner and his wife Cristina Fernandez de Kirchner in a bid to boost government revenue and ensure domestic supplies.
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The country’s crop exports tumbled to a six-year low in 2015. Argentina’s annual record for crop exports was $25.1 billion in 2011.

http://www.bloomberg.com/news/articles/2016-01-04/argentine-exports-soar-2-billion-last-three-weeks-on-new-rules

[forest444]

1. Which is good - except that figure is misleading in that it uses a low November baseline

That month, grains were being temporarily hoarded to take advantage of a tax cut they would have gotten from either candidate (Macri or Scioli, who both had grain export tax cuts in their campaign platforms).

Compared to 2015 as a whole, the increase is smaller (actually nil, if even half that amount had been delivered in November - which it certainly would have if this had not been an election year).

With the elections behind them, the grains would have been sold in any case. Obviously if an election result means that taxes for a certain sector will be cut a month later, that sector will temporarily retain the product until said tax cut is enacted.

The export tax cuts are a good idea, up to a point. Take it too far (as Macri has), and grain conglomerates deliberately begin raising domestic prices to crimp local demand (as they indeed have - by 30 to 100%).