Agrochemicals become optimistic following Argentine elections

Argentina’s Congressional election upsets could benefit the country’s agrochemical and fertilizer industries, a source said on Monday.

The rural sector had managed to place ten new legislators in the Lower Chamber of the National Congress, along with two national senators and hundreds of local representatives in Sunday’s elections.

President Cristina Fernandez de Kirchner lost power in Congress as a result of the mid-term elections. Voters decided upon a third of the Senate and half of the Lower Chamber.
Voters opted for change in the wake of a lengthy farm strike, which was sparked by the government’s attempt to raise agricultural export taxes.

Sixty percent of the voters chose pro-agriculture candidates, according to news reports.

Agrochemical producers hope that the elections will improve the government’s strained relations with farmers, which in turn could boost demand for agrochemicals, said Eduardo Fay, president of Mosaic Argentina.

“The parliament’s [Congress] ability to have a positive impact on the agrarian policies is based on the correct functioning of the virtuous circle between the farmers, the parliament and the executive”, Fay said.

Fay said he believes relations between farmers and the government will improve, since the cost of not improving would be too expensive.

The two sides broke relations after the government attempted to increase export taxes on rural products. The increase was discarded after Argentine Vice President Julio Cobos voted against it in the Senate.

Uncertainty concerning future relations with the government and an ongoing drought caused farmers to reduce their planted areas.

“We should have a total grain production of about 115m tonnes instead of being concerned because there's only 70m tonnes", Fay said.

Some executives were sceptical that the new Congress could improve agrochemical sales - saying the drought had a far larger influence on such markets.

“Today the most important impact on agrochemical products is the climate. As long as it doesn't rain properly… the Argentine rural sector will continue to be complicated,” said Jorge Hernandez, Profertil institutional relations manager.

The newly elected “agro-congressmen” will have the task of revising the export taxes legislation, reversing the crisis being experienced by cereal producers and guaranteeing financing for farmers to recover from depressed production volumes.