Argentina’s recently declared default has fueled the worst peso route in more than ten years and is pushing the country deeper into recession. In response the country’s growers are hoarding even more of their harvested soybeans which are priced in dollars. As of August 20th Argentina’s farmers have sold only 55% of their record-breaking 55 million ton soybean crop compared to 64% a year before, and the lack of tax dollars from agricultural exports is reducing the country’s main source of currency. Argentina’s foreign currency reserves have fallen to $28.5 billion – an eight-year low and the peso has weakened by 22% so far this year to 8.4080 to the dollar, making it the third worst performing currency behind Ghana and Ukraine. In January the Economy Minister of Argentina claimed that farmers were hoarding $4 billion worth of soybeans. Some sales will occur in September and October from the need to finance future operations, however the hoarding comes at its own risk as soybeans have fallen by 18% so far this year on the Chicago Board of Trade.
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