The increase in export duties on agricultural commodities from Argentina could mean that the South American country exports less. Farmers have to cover high production costs with less
income.
Agricultural associations are complaining that the higher duties will push Argentina's most important economic sector into crisis. This could backfire for the government.
In future, China's great hunger for raw materials is likely to be served more from the USA.
In Argentina, farmers will invest less in future; in particular, crops that are expensive to produce, such as maize, will be grown less. Fewer US dollars will soon be coming into the crisis-ridden country and tax revenues from farmers are likely to dry up.
The national currency, the peso, has lost 83% of its purchasing power in the last four years. The inflation rate has risen to 50%.
Source
HANSA Terminhandel
