Argentine election may boost farmer spending, grain prices -biotech firm Bioceres By Reuters

By Tom Polansek

(Reuters) – Argentina’s farmers may be more willing to spend money on seeds and other agricultural products, hoping that new President-elect Javier Milei’s policies will improve earnings from their future harvests, the chief executive of Argentine biotech firm Bioceres said on Tuesday.

Milei’s election and recent rains are fueling optimism among some in Argentina’s agribusiness sector after the country struggled with a historic drought.

“There’s a very important element that you can notice right away, which is how people feel in terms of the agricultural sector,” Bioceres CEO Federico Trucco said in an interview. “That may affect their purchasing decisions today.”

Enthusiasm among farmers will probably be reflected “in the next few quarters in terms of businesses that are associated to agriculture in Argentina,” Trucco added.

Argentina is one of the world’s top exporters of soy, corn, wheat and beef. Still, its farmers have been asking for the elimination of taxes and caps that they blame for crimping grain and meat exports for years.

Milei, a far-right libertarian, has promised to eliminate export taxes and move to a single exchange rate.

Some farmers had expressed concern with Milei’s lack of experience and populist rhetoric, however, and it remains to be seen how quickly he may be able to make changes.

“If he unifies the FX market, and there is only one exchange rate, and removes export taxation that equates for a third of the international price, you might have a scenario in Argentina where the price of grain might double in real dollars to farmers,” Trucco said.

Bioceres is leading a global push to establish genetically modified wheat. Prices for seeds the company sells are correlated to the prices of wheat and soy crops.

“Anything that improves farmers’ incomes is good for us,” Trucco said. “The more money they have, the more likely they are to spend in production technologies.”