Argentina's economic, political turmoil affects grain trade
February 01, 2002
by Chrystal Shannon
Recent economic turmoil and political uncertainty in Argentina have affected that country’s grain trade, according to a report by the U.S. agricultural attaché. According to the Jan. 2 report, both producers and exporters have been reluctant to sell grain until the country’s currency and bank situations are clarified.
Grain trading at the Buenos Aires Grain Exchange was suspended for 10 days in late December and early January, although current contracts were being honored. The Rosario Grain Exchange, although remaining open for trading throughout, has seen few transactions.
The economic crisis, which included the devaluation of the peso, has not yet had a significant impact on production of grains but this could change if the currency situation is not clarified, the report said. Major suppliers reportedly have suspended shipments until they find out how they will be paid and what value the currency will have.
The report also raised the possibility that Argentina may soon have problems supplying wheat to Brazil. "Local contacts report that no shortages currently exist, but supply problems could appear if the uncertainty is not resolved by later this month," the report said.