Lowering the Peso to Raise Cattle Returns

ARGENTINA - Argentina’s industrial and beef sectors are demanding the government lower the value of the Argentine peso to improve exports and overcome the economic crisis.
calendar icon 8 December 2008
clock icon 1 minute read

Argentina has a floating exchange rate, but the Central Bank normally intervenes in the money market to stabilize the peso’s value. Last week, the currency lost 3¢ to the dollar, leaving it at 3.34 pesos/dollar, writes Muriel Elizabeth Hayes for the Argentine BeefPackers S.A. Experts believe the peso should sit around 3.50 to 4.00 pesos to the dollar.

Beef exporters have noticed that Australian prices are now very close to those of Argentina, as the Australian dollar took a nose dive in the last two months. Thus there is serious concern that Australia could take over the Russian market, which accounts for 76% of all beef exports from Argentina.

The news reported over the weekend that Belarus plans to export 115,000 tons of meat to Russia in 2009 has made Argentine beef exporters even more concerned.

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