Leadership Change in Argentina to Bring Policy Changes

Last November, Argentines went to the polls and voted for change, electing Mauricio Macri president and ending over decade of single party rule and a return to market oriented policies. While it will be some time before Mr. Macri can fully implement his own political agenda, he has already made commitments that will impact agricultural trade. In December, Macri announced that he will eliminate export taxes on grains and make significant reductions on taxes on soybeans. He seeks to boost Argentina’s agricultural production and to export less grain and more value added products. Ultimately, this may make corn, wheat, and soy more attractive alternatives in the short term, to dry beans and result in some crop conversion away from dry bean production.

Mr. Macri has also committed to new currency controls which will lead to better returns for farmers selling dollar dominated commodities. However there is still fear of inflation and currency instability, which could cause dry bean farmers to sell off bean stocks as quickly as possible. In general, leadership change bodes well for Argentina’s economic recovery but it will not be a quick nor easy process to reverse so many years of bad policy. We will continue to monitor the situation and report on the implications for the U.S. dry bean industry.