ARGENTINA – Peronist Alberto Fernandez wins presidential election (October 27, 2019).
Alberto Fernandez had 48.1% of the vote, ahead of Macri’s 40.4%, with more than 97% of ballots counted, putting the center-left challenger over the 45% threshold to avoid a runoff and win the election outright.
Fernández’s win signals the return to national power of Peronism, tilting the nation back toward left-wing populism at a time of economic crisis. But while voters rejected the austerity of Macri’s government, the outcome was also tighter than expected, reflecting wariness about Fernández’s ability to steer the economy through tricky waters.
President-elect Fernández, who assumes office on 10 December, will run into immediate difficulty given the lack of funds to play with: The economy is contracting, inflation is above 50%, and unemployment is more than 10% and 35% of the population lives below the poverty line. Investors also expect the government to default at some point. Macri’s administration racked up debt to cover the bloated deficit he inherited from former president Cristina Kirchner.
He must also satisfy the competing demands of far-left factions in his broad coalition that want more social spending, and the International Monetary Fund, which agreed to a record USD 56 billion bailout last year. The IMF will likely have little appetite to dole out more cash if Fernández implements policies that risk a balanced budget.
His victory, and the uncertainty around it, comes at a fragile moment for Latin America. A wave of violent, anti-austerity protests has rocked Chile and Ecuador; Peru faces major political uncertainty; Venezuela’s economy has collapsed; and the presidential election result in Bolivia has been called into question.
Shortly after the result was announced Sunday, Argentina’s central bank (BCRA) announced it is tightening currency controls. US Dollar purchases will be restricted to USD 200 per month, down from USD 10 000 per month. These measures, which were implemented to preserve the reserves of the central bank, will remain in place until December.
PARAGUAY – Rice emerging at Salitre Cue farm (October 2019).
We have registered some small rains over the two first weeks of October which helped the river to recover a bit and served as well for the development of the seeds in the 1st block sowed end of August (Block G). Meanwhile, as the river is low, we had to adjust optimal irrigation level of the fields already in growing stage by pump water from our reservoir. So, any rainwater helps to refill the reservoir.
The intense uniform green colour of the crop shows that water is well distributed, and that the nitrogen applied is being well used by the plants.
Paddy crop is strongly influenced by water supply and water should be kept standing in the field throughout the growth period. Continuous flooding helps ensure sufficient water (elimination of moisture stress and favourable micro-climate to crop production) with greater availability of nutrients such as phosphorus, iron and manganese and control weeds.
2nd stage surface (430 ha of paddy rice) will start to be irrigated by mid-October. You can see some emerging seeds taking benefit from the natural irrigation supplied by some rainwater.
Last week of October, we are going to sow another block of around 240 ha. (Block E – stage 3). Then, block D and C are going to be sowed at final stage, subject to water availability (level of the river) as all the other fields will require water at the same time but not with the same distribution, and pumping has a cost. So, we should have a 4 stages sowing.
We have also finished to refresh the master house. The roof was particularly affected by the torrential rains registered in May in the country (please see post Mayo 2019).
PARAGUAY – Sowing continues at Salitre Cue farm (October 2019).
After having sowed our 1st stage surface, we are about the restart sowing of stage 2 (430 ha of paddy rice). Land has been prepared and will be sowed during the 1st week-end of October. Our strategy is to sow in stages to reduce our operating risks (weather issues and irrigation restrictions) while we will have a better control of the plots as they are not going to be all in the same stage at the same moment.
The 1st stage sowing is developing well as you can see (herbicides and nitrogen have been applied) and we are going to start to irrigate those plots in about 7 days.
For now, the river is at a low level and does not permit to pump water. Rains are forecasted and we have also water stored in our reservoir to start irrigation process.
PARAGUAY – Sowing is advancing well at Salitre Cue farm (September 2019).
We are currently in the sowing peak and so far, 540 ha have been sowed in very good conditions. We are going to restart to sow by end of September as our objective is to sow in 3 stages the full surface we allocate to paddy rice production this season. This way we can have a harvest in stage and reduce our operating risks (weather issues and irrigation restrictions) while we will have a better control of the plots as they are not going to be all in the same stage at the same moment.
Below you can see the treatment of seeds with insecticides and fungicides applied before being sowed.
For the 1st plots already sowed, herbicides and nitrogen are going to be applied soon. Nitrogen is the most important nutrient for rice productivity as it encourages the vegetative growth of paddy. the seeds are already emerging as you can see.
ARGENTINA – Argentina imposes currency controls (September 1st, 2019).
On September 1st, Argentina’s government has imposed capital controls to stop a slump in foreign currency reserves and the peso that has pushed the country to the brink of default.
The announcement comes as Argentina’s currency crisis spirals out of control. About $3 billion drained out of foreign currency reserves between 29 and 30 august alone as the government struggled to repay short-term debt and slow the drop in the peso.
The financial crisis has also been exacerbated by Macri’s defeat in a recent primary poll. The peso collapsed more than 25% last month after primary election results showed the market-friendly government of Macri has little chance of retaining power in October’s polls. President Macri has given up trying to restore investors’ confidence and has instead resorted to the policies he had criticized his predecessors for imposing.
Briefly, the central bank will now requires exporters to repatriate within 5 days earnings from sales abroad, while all companies, not just banks, must seek authorisation to sell pesos for foreign currency. Individual Argentines will be limited to dollar purchases of no more than $10,000 a month. These measures, which will be effective until December 31, 2019, were designed by the Argentine Government as a temporary emergency solution to prevent the dollarization of certain cash flows.
For now, these measures are not affecting directly our business in Argentina as we are not an export company and sale locally in peso our beef production. However, we believe this is an initial step of a return to heavy state intervention.