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Economic Misery in Argentina as reforms are slow to take effect

Since taking office more than three years ago, President Mauricio Macri has broken with the budget-busting populism that has dominated Argentina for much of the past century causing crisis after crisis, embracing the grim arithmetic of economic orthodoxy. President Macri has turned away from left-wing populism. He vowed to shrink Argentina’s monumental deficits by diminishing the largess of the state. The trouble is that Argentines have yet to collect on the other element the president promised:…

Argentina’s past energy imbalance is declining quickly

Argentina has been stepping up export sales of petroleum products to Brazil, Chile, and Uruguay as its production from the Vaca Muerta oil fields surges. Output has shot up 169% year on year to 31 million cu m/d in February, pushing up total production 7.9% to 135 million cu m/d, the latest numbers from the Energy Secretariat show. The secretariat has estimated that production could double to 260 million cu m/d in 2023, meaning that it must find new markets for additional production. As part of this, Argentina…

Which countries have the highest public debt levels?

Global debt has climbed at an eye-watering pace over the last decade. According to the International Monetary Fund, global debt climbed to 225% of global GDP in 2017. That’s 12 percentage points higher than the previous record level set in 2009, during the Global Financial Crisis, and many have pointed toward the global debt pile-up, particularly public debt, as the potential culprit for the next global financial crisis. Countries with most public debtInfogram The increase in global debt over…

It is expected that Argentina’s Ag futures will grow 35% this year

A good sign for the Argentine farm economy: during the past January, the Buenos Aires Futures Exchange (MATBA) operated 3.2 million metric tons of grains futures, growing 14% versus January 2017 and beating a new record for this month reaching 60 MMT. In the previous years (2015 to 2017) MATBA operated between 1.5 and 1.9 MMT of futures contracts in January. The first large step occurred in 2018 when volume jumped to 2.8 MMT, but now the trend seems to secure and the wheat is the “star” crop. As…

What now for South America and Venezuela as the pink tide recedes?

While nearly two decades of ideologically driven economic mismanagement has turned Venezuela from a relatively wealthy oil state into a Zimbabwe-like basket case, Chile has mainly stayed the course, politically and economically, just to the right or left of the sensible centre. Wild swings avoided Since the restoration of democracy in the late-1980s, this long, thin ribbon of a country has largely avoided the wild boom-and-bust pendulum swings that have characterised much of the continent’s stop-start…

Argentine winter crops bring fresh dollars to a weak economy

In January, oilseed industry and grain exporters entered USD 1,756 million into the Argentine economy, versus USD 1,040 million in December 2018. Some analysts celebrate this fact saying that thanks to better harvests of wheat and barley, export companies are enhancing the income of dollars into the Argentine economy. According to the press release of the Oilseed Industry Chamber (CIARA), this increase of export dollars is related to the purchase of these two winter crops by the exporters. In fact, 8,4 MMT…

Excellent Rains in Argentina’s soybean belt give expectations of a bumper 2019 harvest

Unlike last year the rains has been good in key parts of the Pampas including northern Buenos Aires, and southern Cordoba, Santa Fe, and Entre Rios provinces Rainstorms are sweeping Argentina’s soy belt, building soil moisture needed to guarantee good yields when crops blossom in February and providing some cushion for China to buy should its trade war with the United States continue to limit U.S. supplies. Bolstered by strong showers in key parts of the Pampas farm region, which meteorologists expect…

Farms in Argentina continue to underpin the countries economic recovery with an expected USD 3 billion of sales before March 2019

This is the calculation for the remainder of the soybean and corn harvest, as well as the exports of the new seasons wheat. Despite some flooding, it shows the hope of a super harvest is now likely to be realised. The wheat harvest already over two million tonnes. Despite flooding from over 380 mm of rain in some regions from a storm last weekend, which will damage yields in some areas. It is a shared bet by the government and analysts estimate that the recovery of the overall economy will now be in the first…

Argentina: A Perfect Storm Creates A Buying Opportunity

2018 has been a tumultuous year for Argentina. From one of the most severe droughts the country has experienced in decades to the collapse of the peso and equity markets, to a $50 billion IMF bailout, a series of investor storms have hit Argentina and prompted investors to run for shelter. But while these economic setbacks have caused damage, they have also created a historic opportunity to cheaply buy into an economy which is about to get a significant second wind due to the economic policies of President…

Argentina has opened up a range of sectors: New Multi-layered investment options

image of Doing business in Argentina
HEADING UP Argentina’s reforms are pushing the economy in the right direction When Mauricio Macri came to power in late 2015 and promised to fix Argentina’s distorted economy it caught the world’s attention. In the LatAm INVESTOR Argentina Report published in Q2 2016, they described how closed sectors were being opened up for international investors. Two years later we’re back with an update. Macri’s first 100 days were a whirlwind of rapid changes, as he tackled the most perverse…

Argentina Economy turns with the first trade surplus since December 2016

September’s trade balance improvement was driven by significant declines in imports of capital and consumer goods, as well as a more competitive peso currency Argentina had a trade surplus of US$ 314 million in September, official statistics agency Indec said on Tuesday, the first since December 2016 and an early sign the devaluation of the peso currency has benefited the country’s exporters.  Economists say September’s trade balance improvement was driven by significant declines in imports…

Templeton Funds: “Argentina suffered a speculative attack but is now recovering”

The head of the largest investment fund in Argentina attributed the dollar crisis to misinformation in the financial markets. One of the biggest investors in Argentina said that the financial crisis is ending, and he blamed the chaos that hit the market this summer a “massive speculative attack” and the exaggerated reaction at a local level. The funds controlled by Michael Hasenstab, a major fund manager of Franklin Templeton, invested about 4.6 billion dollars in Argentine debt, betting that the…

Argentina’s huge wheat harvest should boost its struggling currency

Argentina’s plummeting currency ( AR Peso ) is set for buffering from bumper wheat crops as it becomes one of the few countries to emerge from a 2018 harvest with a sizeable yield. Several top producers from around the world, including Australia, the US, and much of Europe, have struggled to deliver high yields in the face of a difficult climate involving droughts and extraordinary heatwaves. This has caused Asian countries such as Indonesia, which ranks as one of the highest purchasers of wheat worldwide,…

Argentina’s Currency Collapse

Last Wednesday (29th August) the Argentine peso lost over 7% against the US dollar. Thursday it lost another 12.5%. It’s been cut in half over the past year. In dollar terms, the MSCI Argentina index is down 57% since it’s January top. But it’s still not a bargain, given the high inflation rate and political uncertainties. Back in June 2017 – partly due to investors being enamoured with the government but also as a symptom of the global bond bubble – Argentina even managed to issue…

Bumper wheat harvest should ignite Argentina economy

August 10, 2018
Uncategorized
A record wheat harvest expected in Argentina this year could arrive just in time to jumpstart the ailing South American economy in the fourth quarter, after growth has been hit by low investment, high inflation and a soy crop devastated by drought. Farmers are rushing to plant wheat in the moist conditions left by rainstorms that helped destroy Argentina’s recently-harvested soy bean crop. Months of dry weather gave way in April to three weeks of storms that helped cut the crop to about 35 million tonnes…
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