Devaluation of Argentine Peso Expected to Increase Grain Export

On Thursday, the currency devaluation in Argentina is set to begin, and along with this, grain export is expected to increase.

According to CNBC, the full access of the country to US dollars has resulted in a "more than 26.5 percent devaluation" of the Argentine peso, ending up with farmers earning more with their means of livelihood.

In his inauguration last week, new Argentina President Mauricio Macri vowed to revive the Pampas farm belt through free market policies.

This efforts to revitalize grain production is alongside the forecast of the US Department of Agriculture that global stocks of corns, soybeans and wheat will hit the highest this season.

"There is strong demand for grains in the Middle East and Asia. So $400 million in sales per day is realistic, considering the huge stockpiles that Argentina farmers have," said analyst Leandro Pierbattisti in the CNBC report.

He noted that a vital increase in the exports of corn, wheat and soybeans should be expected in the coming months.

In a similar report, AGWeb noted that Finance Minister Alfonso Prat-Gay has revealed that they have come to terms with grain exporters about the bringing in of $400 million daily for the next three weeks.

"Through many other channels we expect to have a total inflow of between $15 billion to $25 billion in the next four weeks," Prat-Gay added.

It also explained that farmers in the country have been keeping their crops since they started protesting the taxes on the goods and the tedious process to obtain export permits.

AGWeb mentioned that latest data results reveal that Argentine farmers have "$11.4 billion of soy, corn and wheat for sale."

Aside from this, ex-head of the Argentina tax agency detailed in the same report that the grain products also recorded $6 billion soybeans, $3.4 billion worth of corn and $2 billion worth of wheat available for export.

With Macri's announcement of the eliminations of taxes on these grains, it was reported that the tariff on soybeans was cut to around 5 percent.

Such changes in policy are expected to encourage farmers to let go of the crops they stored in the past months, and lead to bigger shipments of products from the country to other nations.

AgriMoney added that the promise of the currency to float will support the existing reserves of the country and encourage farmers to produce more because of the increase in the value of their crops.