Argentine Economy

[Rioman]

Here is article that was referring to - obviously it does not mean that anything changed: By Eliana Raszewski.

May 29 (Bloomberg) -- Argentina's government, bowing to pressure from farmers, said it will impose a cap on variable export taxes for grains and oilseeds to end two months of protests that had disrupted trade and caused food shortages.

The maximum levy, which previously rose as high as 95 percent depending on prices, was reduced for corn, soybeans, wheat and sunflower seed when prices rise to specified ranges, Cabinet Chief Alberto Fernandez said today during a press conference in Buenos Aires. Tax rates will remain in place at prices below those levels, he said.

'We hope this announcement puts an end to the conflict with farmers,'' said Fernandez in a press conference in Buenos Aires. 'We want farmers to keep producing.''

The government sought to end a conflict that led farmers to resume demonstrations yesterday until June 2, the third protest since the new tax system was announced in March. Ricardo Buryaile, vice president of the Argentine Rural Confederation, said announcement won't end the dispute.

'The protests will continue as it was scheduled,'' said Buryaile in an interview with Todo Noticias television channel.

Grain trucks stopped arriving at Argentina's main ports after farmers resumed the blockades yesterday. The Rosario Board of Trade said on its Web site that no trucks arrived at regional ports overnight, compared with an average of 5,532 trucks a year ago. Truck arrivals are down 8 percent so far this year because of the two-month dispute with farmers, the board said.

Tax-Rate Cut.

The government reduced the maximum export tax on soybeans to 51.7 percent from 55.9 percent when prices reach $700 a metric ton, and will be 52.7 percent rather than 58.5 percent when prices reach $750, according to a spreadsheet of the changes provided by the economy ministry. The rate remains unchanged for prices up to $600, when the tax will be 49.3 percent.

Soybean futures closed today on the Chicago Board of Trade at $13.23 a bushel, or $486 a ton, the ministry said. Soybeans reached a record $15.865 a bushel, or $582.93 a ton, on March 3.

The sunflower-seed tax was cut to 51 percent from 54.6 percent when prices are at $800 a ton, and will be 52.7 percent rather than 59.1 percent when prices are at $900, the economy ministry said.

Corn, Wheat.

The tax on corn was cut to 45 percent from 53.8 percent when prices reach $400 a ton, the ministry said. They will be unchanged at 40 percent when the price is $300 a ton. Corn futures closed today at $5.8275 a bushel, or $229.42 a ton, down from a record $6.39 a bushel, or $251.56 a ton, on May 9.

The rate for wheat was reduced to 37.9 percent from 39.8 percent when prices reach $500 a ton, and will be unchanged at 35.4 percent for prices at $450, the ministry said. The rate for $600 wheat will be 41.6 percent, down from 46.3 percent. Wheat futures in Chicago closed at $7.415 a bushel, or $273.19 a ton, down from a record $13.495 a bushel, or $495.85 a ton, on Feb. 27.

'The announcement is more of the same we had,'' said Luciano Miguens, president of the Rural Society, the country's biggest farm group. 'It's surprising that they didn't ask us for an opinion.''

To contact the reporter on this story: Eliana Raszewski in Buenos Aires eraszewski@bloomberg. Net

Last Updated: May 29, 2008 20:14 EDT

[Rioman]

Appreciate reponse, but this is not article that I thought I saw as it was Bloomberg and am almost sure it was dated last thurs night 8pm. Do not think I was seeing things, but maybe was.

[Tessan]

I thought I caught a bloomberg piece on this forum last Thurs night that indicated the strike was over. Of course, now I cannot find it. Anymore info on this would be greatly appreciated. Thx.

No one said it was over. There was a post my me, from bloomberg that was titled "Soybeans Plunge on Speculation Argentine Farm Strike Will End." Speculation is not fact. It was back 5-19, in a different thread. After that soybeans shot up, after it became clear the gov. was not going to compromise yet.

http://www.argentinaprivate.com/foru...ead.php?t=4606

[Rioman]

I thought I caught a Bloomberg piece on this forum last Thurs night that indicated the strike was over. Of course, now I cannot find it. Anymore info on this would be greatly appreciated. Thx.

[Tessan]

Argentine Farmers Extend Halt of Grain Exports Until June 9

By Eliana Raszewski.

June 2 (Bloomberg) -- Argentine farmers prolonged protests over higher taxes on grain and oilseed exports until June 9, Luciano Miguens, president of the country's Rural Society, said.

Farmers will continue halting grain and oilseed exports until next week, while they will resume trade of livestock tomorrow, Miguens said in a televised press conference from the port town of Rosario.

To contact the reporter on this story: Eliana Raszewski in Buenos Aires eraszewski@bloomberg. Net

Last Updated: June 2, 2008 22:13 EDT

[Tessan]

Looks like the K's are trying to strengthen the peso. They tried to keep it around 3.15p for a long time, now they are bring it up by selling dollars. DOW JONES NEWSWIRES says it's because of the farm strike. Could be, but it might also be a way to bring down inflation, by making the peso stronger. La Nación said on 5-29 that the central bank had spent about 1.4 billion dollars making the peso stronger. Since they had been intervening every market day since then, they are probably around 1.6-1.7 billion now. That should leave the central bank about 48.3 billion in ammunition to strengthen the peso. Don't know how fares the central bank wants to take the peso, but if they start spending too many dollars, someone will eventually take the other side of the trade. Most trader are just watching, and don't want to fight the bank yet. Also if the gov. settles with the farmers, anyone shorting the peso, can get burned big time.

--------------------------------------------------------

Of DOW JONES NEWSWIRES.

BUENOS AIRES (Dow Jones)--The Argentine peso continued to gain ground on the U. S. Dollar Monday as the central bank apparently continued to sell dollars in a bid to firm the local currency amid an entrenched farm conflict.

The peso closed at ARS3.0875 against the dollar in interbank trading, from ARS3.10 at Friday's close. It has been a sharp turnaround from the five-year weak-point of ARS3.1825 the peso hit amid farm-crisis worry on April 22. To push the peso, the central bank has sold more than $1.4 billion in reserves over the past few weeks.

For nearly five years, the government has regularly bought dollars to maintain a weak peso that favors exporters. Currency traders think the central bank's decision to deliberately strengthen the peso of late is a way to show cereal exporters just who's in charge.

http://www.fxstreet.com/news/forex-n...5-cb7de6e37009

[Exon123]

Lets Sidney and I buy some apartments and get "Rich" on the appreciation.

Exon

[Schmoj]

I don't have any assets or liabilities here (balance sheet accounts) I only have revenue and expenses here (income statement accounts) I don't invest or borrow; I only earn and spend. Think about it.

Another way to state this is, I don't buy or borrow. I only earn and burn.

Sound economic policy in a place like this if you ask me.

[Tessan]

I loaded a container yesterday that needed to be delivered by a set date. The Customs Service here, spent 2 weeks finding fault with all the documentation, which there was little to find and what there was of no consequence. Yesterday was the cut-off date to finalise the loading and during our previous discussions with Custom's Verification section, they became aware of the finite timing involved. Yesterday morning they demanded a cash payment of U$10,000 or else they would continue to delay the authorisation. Exactly the same amount as the value of the goods. No discussion. Pay or else! I paid the money and the money went into a cash box in their open office, the other 3 agents fully aware of what was going on. Papers signed as a matter of course and every thing was straight forward from then on. Normally such a payment would be at the most, ARG$1000 or at the most $2000. Now ARG$30,000. So it is almost becoming impossible to do business here. The twin bogies of inflation and corruption prevent it.

Argento

It sucks that you have to pay a bribe, to get passed the customs people. Now that you paid them 30000P to get your stuff shipped, they're going to remember it, and hit you up again with a similar amount of money.

Usually in these situations you have to stay polite, even though they are robbing you. And tell them nicely, that you can't pay that much, because you making less money then that, on the sale of the items. They will usually find a lower number, if you let them know you ship X time a year, and they will get more money in the future. But it hard to talk very friendly with someone who is robbing you.

30k seems high for 1 container. If it is rare for them to get that much, they will remember you next time as the big money man, and hit you up again.

The only thing I can think of, is next time give yourself the maximum about of time you can, to get through customs. Don't let them know of any time constraints, and fight them, until the come down on the bribe to the more normal level. Let them know you can't pay that much and stay in business. And always stay polite. It's hard doing business in a corrupt society.

[Argento]

You should bring a lawyer down there tommorrow and demand your money back or you will go to customs jeffe and then to the newspapers. If you had a witness with you at the time of the payoff, that should help.

Or go to your embassy and file a complaint.

Bring your cell phone and take pics of the thieves

The point that is not understood by people not involved in business here is that the money paid in coimas is distributed from the initial receivers all the way up the chain of command. Beginning of course with the direct boss and so on upwards to the political head of the department. And ultimately to the President. The only principle involved is "What is in it for me?" Each person gets their cut and there is no way out of the quandary. Any complaint would and is shrugged-off by the boss because he is a part of the distribution chain. Reform can only come down from the top and that has not changed in 200 years. Argentina became a city based on smuggling goods at its very beginning, with the customs service corrupt from that beginning.

The papers know the truth, print it, but it is water off a duck's back.

Politics here is only a way to stick your snout in the trough and get money. You never see or hear any of them wanting to enter politics to improve the morality and better the lives of the community at large. It is still class war stuff here as a diversion to the real game which is getting the money from the bribes. And all branches of government are involved. The executive, the administration, the military and law enforcement. Argentina is not so much a nation but a football team; and only if they are winning.

Argento

[Dickhead]

That is true, for my income statement. But I have a healthy balance sheet in the US. But not all the chicas are totally bad with money. Dickhead's María has a paid-for house (she earned all the money herself); Romina from Catto's owns her own, paid for apartment, and another chica I know just sold her orchard and bought an apartment with a four-year mortgage and has it rented out at positive cash flow. But, she also got a pretty good sized gift for the down payment from some wealthy Danish diplomat she met hooking.

Of course these are the exceptions and not the rule. The general rule of chica financial management can be summed up with the popular phrase: "No tengo crédito."

[Jackson]

I don't have any assets or liabilities here (balance sheet accounts) I only have revenue and expenses here (income statement accounts) I don't invest or borrow; I only earn and spend. Think about it.

Another way to state this is, I don't buy or borrow. I only earn and burn.

That sounds like the financial strategy employed by a lot of chicas I know.

[Dickhead]

I don't have any assets or liabilities here (balance sheet accounts) I only have revenue and expenses here (income statement accounts) I don't invest or borrow; I only earn and spend. Think about it.

Another way to state this is, I don't buy or borrow. I only earn and burn.

[Alan23]

So what is the future?

Argento

Sadly the answer is: more of the same!

Argentina's immigration history is heavily weighted in numbers and influence by Europeans. Apparently these immigrants (particularly the Italian component) have not chosen to leave one of their less flattering traits in the motherland - which is a real shame. Many immigrants to other countries have taken the opportunity to break with the past, leaving some of the impediments of their previous society behind. Don't believe it has happened this time.

[Thomaso276]

You should bring a lawyer down there tommorrow and demand your money back or you will go to customs jeffe and then to the newspapers. If you had a witness with you at the time of the payoff, that should help.

Or go to your embassy and file a complaint.

Bring your cell phone and take pics of the thieves