March 25, 2015

Farmers in Argentina are stockpiling more than double the amount of soybeans hoarded last year according to the Argentine Rural Society (SRA) and local traders, even as the government is increasing pressure on farmers to sell.

The SRA and local grain exchanges estimate that farmers are hoarding 7.4 million tons of soybeans, or 14% of the 52 million ton 2013/14 crop. At the same point last year, farmers were hoarding 3.4 million tons, or 7.1% of the previous 48 million ton crop. The country’s government estimates are even higher with the agriculture minister, Alberto Casamiquela stating that up to 10 million tons of soy is being hoarded.

The hoarding which continues as a hedge against soaring inflation and low global oilseed prices, is strongly criticized by the cash-strapped government which need the 35% tax imposed on soy exports to boost its Central Bank reserves. In response, the government has imposed a new regulation that the purchase of every grain storage bag must be reported and any farmer found hoarding soybeans will be disqualified from receiving state loans.

Soy can be stored for up to three years and stockpiles are expected to grow. Forecasts for the upcoming soybean harvest range between 56 and 60 million tons – significantly higher than last year’s record 53.4 million tons.

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