Argentines fight grain nationalisation 4/03/2009 9:48:00 AM
ARGENTINE farmers are reportedly railing against their government’s plans to nationalise grain trading in the South American nation. And it could have an impact on world commodity prices in the short term, with industrial action potentially on the cards.
The Commonwealth Bank of Australia (CBA) reported in its daily agricultural commodities newsletter that any action by Argentine farmers would have a particular impact on soybean prices, and by extension, canola.
The CBA said any disruption in Argentina could boost US soybean prices, which would in turn feed through to other oilseed commodities such as canola.
Reports in Argentine newspapers have suggested that the government's tax collection agency, AFIP, is considering creating a body to control the domestic and foreign trading of grains, flours and oils.
Newspaper reports have suggested the Argentine farming lobby is furious with the planned body, saying it would mean more taxes for growers and was nothing more than a government revenue raiser.
However, there is another theory surrounding the government plan.
The Argentine media have been filled with reports that the plan was deliberately leaked by the government in an attempt to force some of last season’s grain onto the market.
It is estimated about 5 million to 9 million tonnes of soybeans are being carried over in Argentina from the last harvest, which will create large government revenues when sold.
Argentine farmers are no strangers to industrial action.
Growers halted sales and blockaded routes for months last year in reaction to a planned tax hike, prompting the Argentine government to halt a plan to raise export taxes on agricultural commodities.
The news has had little impact as yet on canola prices, either at the international level or at an Australian domestic level.
ABB Grain’s 2008-09 canola price was sitting at $510 a tonne delivered port on Monday, down $10/t on the Monday before.
