| BUENOS AIRES, June 4
BUENOS AIRES, June 4 Argentine growers say they
will increase sales of freshly-harvested soy later this month to
raise cash needed to make mid-year farm credit payments,
temporarily bucking the trend toward hoarding.
Once the loans are repaid, however, they will likely go back
to hanging onto their crops as a hedge against high inflation.
As consumer prices soar and the local currency depreciates,
farmers have taken to hoarding beans as a unit of savings, and
using them to barter for seeds, fertilizers and even pickup
"Between now and the end of July we expect farmers to stop
hoarding and speed up selling," said a Buenos Aires-based grains
trading source who asked no to be named. "In August, after their
loans are settled, there will be no more motivation for them to
Government figures show hoarding has deepened in recent
years. Growers have sold 33 percent of the current crop,
compared with 36 percent at this point in 2013 and 48 percent on
average over the last four years.
"Nonetheless, there should be an increase in soybeans on
offer in the second half of June," said analyst Pablo Adreani.
Growers had to borrow more last season than the season
before due to fast-rising consumer prices that have increased
the cost of planting. Farm credit payments in Argentina, Latin
America's third biggest economy and the world's No. 3 soybean
exporter, are bunched up in December and at mid-year.
"After those payment are made, farmers hold onto all the soy
they can because there is still a lot of uncertainty about
inflation," said Buenos Aires grower Santiago del Solar.
Argentina expects a record soy crop of 55 million tonnes
this season. The government said on Friday that 78 percent of
the harvest had been collected versus 94 percent at this time
last year, as extraordinarily heavy rains have made fields too
swampy to harvest.
By now, Adreani estimated 87 percent of the crop is probably
in after growers took advantage of dry weekend weather that
lasted through Tuesday to speed up harvesting.
Farmers are holding freshly-harvested soy in the long, white
"silo-bags" that have come to dot the Pampas over recent years
as inflation induces them to save in beans rather than pesos.
Once a grower has paid to pack part of his crop into a
silo-bag, it takes a decent profit incentive to make him want to
pay again to take it out and sell it.
The benefits of January's 18 percent peso devaluation have
been eaten up by inflation, clocked by private economists at 30
percent per year.
Currently at 8.1 per dollar, the official peso rate
is expected to keep weakening. Another sharp
devaluation would motivate selling by farmers, who operate in
pesos but whose soybeans are priced in dollars.
(Editing by Andrew Hay)