Buenos Aires - Argentine farmers are hoarding 21.5 million tonnes of soya beans harvested this season, according to government data, as low world prices and financial uncertainty at home prompt them to hang onto a higher percentage than they did a year ago.
Growers are selling “hand to mouth” as one grains export executive put it, releasing just enough into the market to pay taxes, inflation-sensitive operating costs and bank loans that have become more expensive since Argentina's July debt default.
Global 2013/14 soya bean output was 283.1 million tonnes, of which 7.5 percent is being held on Argentine farms.
At the official free on board (FOB) price, the reserves being held from the market are worth $9.7 billion (R107 billion).
If they were to be released it would put downward pressure on global soya bean prices already near four-year lows.
Argentina is the world's number three soya bean exporter and top supplier of soymeal livestock feed, which is fuelling Asia's shift toward a higher-protein diet.
A gulf between the Argentine peso's official rate and black market rate is increasing expectations of a sharp devaluation before the year's end.
The currency is under pressure from high inflation, a shrinking economy and the government's failure to make a July sovereign bond payment.
President Cristina Fernandez has ruled out a hefty intervention on the currency market but has failed to convince local markets, meaning growers are likely to keep hoarding soy to use as a unit of savings preferable to the peso.
Growers harvested 53 million tonnes of soya beans in the 2013/14 crop year, up 9.5 percent from 2012/13 season, according to the agriculture ministry.
Soy is generally planted in September through December in the Argentina, and collected in April through June.
They have sold 31.5 million tonnes of their 2013/14 soy crop so far, or 57 percent of the harvest, ministry data says.
Last year at this time growers had sold about the same in tonnage, accounting for 67 percent of the smaller 2012/13 crop.
“Someone who does not need cash right now will hold off on selling, considering the unstable financial context and the probability of a peso devaluation,” said Leandro Pierbattisti, an analyst with Argentina's grains warehousing chamber.
The trend toward hoarding is clear when compared with the 2009/2010 crop year, when 41.5 million tonnes of soya beans were sold by this point in the season, accounting for 75.5 percent.
Santiago del Solar, who manages 15,000 hectares in the breadbasket Buenos Aires province, said that he and neighbouring farmers would hold back more stock were it not for an inflation rate private economists see hitting 40 percent this year.
He said he has sold 60 percent of his 2013/14 soy crop outright, plus another 20 percent on the futures market.
“Because of inflation you have to sell 20 or 30 percent more soy in order to pay the same bills that you had last year,” he said.
“It costs 20 to 30 percent more than it did a year ago to buy the same amount of fuel, fertiliser and other inputs.” - Reuters