For the past 40 months, Argentina, one of Latin America's largest economies, has been tottering between recovery and disaster. Now, an economic meltdown seems imminent — and, if the past is an indicator, a debt-default in Argentina will likely be felt all over the continent and beyond.

One of Argentina's main problems, lately, is the lack of political consensus on how to best manage the country's fiscal shortfalls. While Argentine President Fernando de la Rua has been instituting a creative mix of fiscal austerity with tax cuts, to prompt consumer spending, and subsidies to the poor, the opposition Justicialist Party, which won control of both houses of congress earlier this month, is aggressively challenging the government's plan to reduce the deficit to zero. These political skirmishes have panicked already skittish investors and sent interest rates so high that the government doesn't appear to have the necessary funds to pay its outstanding debt. A loan extended earlier this year by the International Monetary Fund (IMF) year has failed to restore investor confidence. Unfortunately, the de la Rua administration — which has been buffeted by a senate bribery scandal and dizzying cabinet shuffles — appears to lack the stature to bring together warring factions, even those within his own political coalition.
Argentina must now try to renegotiate its debt with its largest international lenders, with talks brokered, possibly, by the U.S. Treasury Department. After all, it is clearly in America's interest to avoid another large-scale IMF rescue.

The Buenos Aires Herald. Editorial. 10-29-2001

Who will redraw the map?

This belief undergirds the so-called special relationship with Saudi Arabia and other repressive, corrupt states in the Middle East.
To guarantee the supply of Persian Gulf oil, the United States has winked at corruption, refrained from promoting democracy and free markets, ignored escalating evidence of putrid anti-Americanism, and bullied its ally Israel, the only democracy in the region. Turkey was once called "the sick man of Europe." The Arab world is today the "sick man" of the globe, with lower growth rates than even sub-Saharan Africa.
With terrifying suddenness, we now recognize that the regimes upon which we have gambled so much are extremely unstable, as well as treacherous (Saudi Arabia has been secretly funding bin Laden and the Islamo-fascists for years) — and that their likely replacements are our worst nightmares.
Osama bin Laden has a huge following in his native Saudi Arabia and throughout the Arab world. American and British ground forces had better find and kill him because if he is able to escape to Mecca, our big problem would metastasize into something even more frightening. We could not touch him there. It would be unthinkable for America to bomb Mecca. And his presence in the capital of Islam might ignite a revolution that would engulf Saudi Arabia and the whole Gulf region.
Osama bin Laden fancies himself the next Saladin, an Islamic conqueror. He doesn't want to triumph in Saudi Arabia just to purify it of American soldiers, but also because he believes that with the oil weapon in hand he can strangle the West.
Paul Michael Wihbey, a scholar at the D.C.-based Institute for Advanced Strategic and Political Studies, argues that the oil weapon is no weapon at all. Not anymore. The world is awash in oil. It is estimated that Saudi Arabia has 270 billion barrels in oil reserves. Canada and Venezuela each have more than a trillion. (Much of that is heavy oil, but modern techniques can refine it.) Russia and the North Sea produce 7 million barrels a day each, compared with Saudi Arabia's 8 million. And the United States imports as much from the Guinea Gulf in Africa as from Saudi Arabia. There are massive oil deposits under the Grand Banks in Canada, in Mexico and in Indonesia, to say nothing of offshore supplies in Florida and California, as well as the North Slope of Alaska.
The United States can very easily do without Middle East oil, which accounts for 25 percent of total oil imports (provided we are not castrated by our own environmentalists). Why then have we behaved as if they have us over an oil barrel? Only in the Arab world has America failed to urge the kind of political and economic reforms we have lustily encouraged in Central and South America, Africa and Asia.
Bin Laden would conquer the Arab world for Islamo-fascism. America must have an alternative that it is dead serious about creating. "Someone," Mr. Wihbey warns, pointing to the arbitrary lines drawn by European powers in Arabian sand following the First World War, "is going to redraw that map."
We know what an Islamo-fascist map would look like, and it chills the soul: degradation of women, aggressive ignorance, poverty, violence, xenophobia, genocide against Israel and nuclear weapons. This is not far-fetched.
A Pax Americana would build on the two democracies of the region — Israel and Turkey, and extend to Tunisia, Jordan, Azerbaijan, Uzbekistan, Afghanistan and Pakistan. In some cases, a regime change will be necessary (as in Syria and Afghanistan). In other cases, we can build on the pro-Turkish segments and sentiments within Muslim countries. Turkey is the best argument we have that a Muslim nation can be free, reasonably prosperous and modern.
But in any case, we cannot build a decent future for the region until we have utterly defeated the extremists — and confronted the mistakes that brought us to this terrible moment.
MONA CHAREN

Soy, wheat and corn increased their value in local market
Source: La Nacion (The Nation newspaper)
Date: 20-06-01

The measures announced on Friday by the Government - among those the creation of a type change differential for exportation stood out - they had a rising impact for the price of the grains. Yesterday, in the business round of the Term Market for the Cereal Market of Buenos Aires, soy - main Argentinean agricultural product - it concluded the round with highs as US $9 per ton, very near the limit allowed for a day (US $10), and for wheat and corn had improvements as high as US $5.

"The Government aimed to benefit to the primary sector because it knows that the improvements will move toward other productive areas", Ricardo Baccarín of Panagrícola INC, highlighted. The analyst indicated that today the producer has an option, unexpected four days ago, to arbitrate the prices of its crop. "With a value of US $103 per ton of wheat - position January - it is feasible that more producers today decide to sow fine grain, because they glimpse a better campaign."

To be able to capitalize this positive moment, Baccarín recommended to the producers "more than ever" to work with the tools that the future market has. "A possible strategy is to fix a base price for the crop, with the purchase of a put (sale option), and to be open to take advantage of an eventual ascend of the market."

It is worth it to clarify that the positive reaction of the values obeyed, also, to the rises registered in Chicago the day before yesterday and yesterday, main square made up of international prices.

According to Javier Buján, of Granar INC, yesterday many operators with sold positions came out to re-purchase them so not to lose potential rises starting from this differential change prepared by the Government.

Doubts

Nevertheless it pointed out that many doubts exist regarding the way in which the operations will be liquidated. "When beginning to work with a foreign currency that will fluctuate daily, the exporters need to know with what values (Euro/dollar relationship) the operations will be governed. Today it is not regulated if the liquidation will be made according to the price on the closing of the business or if it will be to the existent price in the moment of the shipment."

Yesterday, in the Argentinean ports, the offer was somewhat reserved due to the doubts that still persist on the announced measures. This lack of merchandise made the prices of the grains reached an average high of near US $5 per ton.

Farmers' rejection to economic measures
Source: Ambito Financiero (Financial environment newspaper)
Date: 20-06-01

The economic measures that minister Domingo Cavallo announced «harms the agricultural sector, due to the increase of gas-oil», pointed out the Agrarian and Rural Confederations of Buenos Aires and The Pampas (CARBAP) president, Dardo Chiesa. «The economic measures announced by the national government last weekend harm the agricultural sector, particularly because this week we will already have to pay the increase of the gas-oil and many producers don't know how and when they will recover it», the leader pointed out. Chiesa recognized that at the moment «it is very difficult to make a deep analysis of the economic measures», although he admitted that «the farm comes out harmed by the increase of gas-oil's price by 25 percent». The rural leader highlighted that «although this increase is due to the I.V.A., it continues to be a tax system based on presumptions and the producer will have to pay 25 percent increase at the pump and then, see if he will recover it». He also said that «it should be kept in mind that not all the producers are category 'A', there are many small producers that are category 'C' or mono-contributors and they cannot recover the I.V.A. in any way», he emphasized.

Lastly, Chiesa considered that « the differential exchange rate is very good, but it is for the exporters and it will be necessary to wait and see if it goes down for the producers as well, for that reason I believe that the intention is good but it is damaging to us none the less».

Swinish production demands the promotional law
Source: Ambito Financiero (Financial environment newspaper)
Date: 20-06-01

In this world that has overcome the 6.000 million people barrier, the consumption of animal protein is fundamental for human development. And inside this growth, the most consumed animal protein is the one obtained from swinish meat, followed from the distance by the protein obtained from fish and poultry, and further behind, that of bovine meat. Today the worlds average of swinish meat consumption is reaching 15 kilos per capita per year, with an estimated production of 93 million tons for the year 2001. Countries that consume the important quantity of 70 kilos for inhabitant exist (Denmark and other European countries), and 90% of the consumption is in form of fresh meat, being only 10% elaborated.

Argentina and Uruguay are the two exceptions at world level that contradict these numbers totally. In our country, with a consumption of 8 kilos per inhabitant per year, only 13% is in form of fresh meat (1 kg/person/year only represents 20 grams/person/week). In surveys carried out in different regions of the country, more than 90% of the people affirms that it is one of the most flavorful meats. But the surveys also shows high figures on the concept that swinish meat is bad for our health, increasing cholesterol and, above all, relating pork with the landfill pig. These last concepts, completely erroneous, fall to the ground when we realize that it is the most consumed meat in the world, and that countries like Denmark, with high purchasing power, reach the 70 kg/person/year (it is worth it to mention that heart problems in Denmark are 20% inferior to our country).

Also, due to the correct use of animal improvement, the quality in animal feed, the investments in facilities and the training of personal, examples were obtained with diminished quantity of fat in the meat, and it is important that the commercialization of pork is rated by how meager the meat is (it is the only species that is priced by the real quantity of meat, and this control is made by objective mensurations). At the moment, pork meat offers the lowest cholesterol, it possess less calories and has the highest index of potassium (advisable for hyper-tense people) and it continues being the most flavorful. All these reasons made it possible, more than a year and half ago, to present, in the Chamber of Deputies, a bill for the promotion of the swinish meat. The main ideas are the following ones:

An institute with the representation of all the sectors involved in the chain of value is formed . All the positions of the representatives are ad-honorem.

A fund with the contribution of the private sector (production and industry) is formed without any state contribution.

The primordial objective of the institute is the promotion of the qualities in the new meat, by means of marketing and social communication.

This project was approved unanimously in the Commission of Agriculture of the Chamber of Deputies and today is on that same step in the commissions of Justice and Trade. Compared to other projects of promotion in different sectors (bovine meat, milk, sheep, etc.), it has the advantages of:

Having the collateral of the whole sector (dissidence does not exist among the entities, the association and the industry), demonstrated in the meetings that were carried out in the Secretary of Agriculture for competitiveness.

Not to fix prices. 3 - not to require the state monetary contribution, and although for some it seems one more law, it can be one of the fundamental tools that will generate the sustainable development of the whole chain of value.

Task

An important chain of supermarkets multiplied for 6 the slaughter of pork in the last 8 months to be sold in its sales points. It is worth to highlight that the gondola price is very attractive for the consumers; and the quality, excellent.

The Swinish Producers Association put together a system of certification of farms, marking differences in the quality, the sanity and the hygiene of the meat to guarantee the security of the pork's agricultural chain and its commercialization.

Sales of rice to Brazil are halted again
Source: Ambito Financiero (Financial environment)
Date: 20-06-01

The exchange rate in Brazil slows down the exports of rice from Argentina toward this country again. The Brazilian importers don't want nor can they take a risk with an exchange rate that fluctuates daily, and Argentinean exporters don't accept to assume the default risk that arises from the abrupt changes on the exchange rate in Brazil.

At the moment, the Argentinean exporter is closing business with a Chile, Iran, Haiti and Mexico destinations.

On the other hand, if Uruguay takes a higher risk on selling its product to Brazil, is due to the higher sale pressure that it has, since its crop has been of approximately 1 million tons and they need to export nearly 850 thousand tons. The prices in Asia decreased due to the scarce demand. Vietnam lowered its securities, because the exporters look to liquidate the positions of the old crop to leave room to the autumn-summer crop that is to enter in the market combined with a fresher demand.

In Thailand, 100%B rice suffered a drop on Monday while waiting for confirmation of new sales to Iran. After a deal of 100.000 tons of 100%B quality rice, the Thai government is speaking with the Iranians for another operation of similar characteristic, but without confirmation of volume. Outside of this, exportation activities are minimum.

India's government decided for a politic of subsidized export of the stocks of rice and wheat. According to the new rules, it will have to have exported the stocks of the old crops before receiving the new one, in order to avoid a bigger deterioration of the grain stocked.

In the United States, the new crop of rice that was sowed two weeks ago it is 18% under excellent conditions, 58% under good conditions, 21% in regular conditions and 3% in bad conditions. Texas is the state with the highest percentage (21%) of its crop under excellent conditions.

The futures in Chicago suffered an abrupt ascend in their rates. The July contracts ascended $/t 9, last before the entrance of the contracts of the new crop.

It will be decide today whether or not the Rural is suspend
Source: El Cronista (The Columnist)
Date: 20-06-01

The national government will take in next few hours a definitive decision on the realization or suspension of the traditional Rural Exhibition, due to the bud of aphthous that affects to the cattle. An intermediate approach that they could adopt is that it will be allowed to make the sample, in the property of the Rural Society, although limited to other expressions of the farms, as the agricultural machinery.

In principle, the exhibition should be carried out in the facilities of Palermo between July 19 and August 8. The secretary of Agriculture, Marcelo Regúnaga, will be the one who decides on the matter.

In a tense meeting Regúnaga and Crotto discussed the suspension of the Rural Exhibition
Source: El Cronista (The Columnist)
Date: 20-06-01

Yesterday a tense meeting was carried out in which, among other people, the secretary of Agriculture, Cattle raising, Fishes and Feeding (SAGPyA), Marcelo Regúnaga, and the president of the Argentinean Rural Society (SRA) they discussed the probable suspension of the traditional Rural Exhibition of Palermo, due to the epidemic of aphthous that affects Argentinean livestock. When averaging the meeting, a high source of the Rural sustained that they will wait "the National Government's decision regarding if (being based on the report of epidemiology of the SENASA) it authorizes or not the mobilization of animals toward Palermo, and one or two days later we will emit the corresponding resolution."

When concluding the meeting it was informed that the conversations will continue tomorrow. When retiring, and in a visible bad humor, Enrique Crotto sustained that it was planed "to bring bulls that were vaccinated twice, for there would not be any risk, and if there is it means that the vaccine is not working". On the other hand, Regúnaga said that it was suggested "to postponed the Exhibition for three months ."

However, it was known that in the meeting, the Secretary tried to convince the members of the SRA that they themselves, with their own arguments, make the decision of not carrying out the exhibition.

From the entity it was allowed to transcend the possibility that the exhibition be made anyway, without the presence of animals. In any way, spokesmen of the National Service of Sanity and Agricultural Quality (SENASA) already informed "off the record" that the decision of suspending the traditional Exhibition for at least one week has been already taken at least one week ago, and it is about making it in the less traumatic way possible for the MRS.

The sources of the SENASA also indicated that the reason for not carrying out the exhibition is basically due to the peremptory necessity to give a sign of sanitary rigurosity to the European markets. They explained that the decision do not owe itself to technical reasons as much to political ones.

The authorities of the SENASA and in general of the whole National Government evaluate that the political impact the suspension of the traditional exhibit would have, and inclusive the strong critics that the Rural Society would openly make, would reinforce even more the message needed to send to Europe.

On the other hand, the National Government sees another positive aspect of the suspension of the Exhibition. In the mark of a sustained economic crisis, the president Fernando De La Rúa, would avoid to have to face a probable "booing", in the opportunity of leaving formally inaugurated the exhibit.

De La Rúa received yesterday the Rural Society, when it is not still known if the exhibition of Palermo will be carried out or not
Source: Agriclipping
Date: 20-06-01

Just a few moments ago president Fernando De la Rúa's meeting with the Argentinean Rural Society's (SRA) authorities, who officially invited him to the Exhibition of Palermo in spite of the strong versions about its suspension, concluded. The encounter lasted approximately one hour and when concluded no one informed officially about its content.

On the other hand, as Agriclipping.com was able to find out, today at 4pm the Secretary of Agriculture, Cattle raising, Fishes and Feeding (SAGPyA), Marcelo Regúnaga, will meet with the leaders of the SRA to evaluate the eventual suspension of the annual exhibition of Palermo. Just as it was anticipated yesterday, during the next hours the national authorities will determine if it will be authorized the presence of animals in the exhibition. In any way, it is presumed that the analysis of the epidemiologists of the National Services of Sanity and Agricultural Quality (SENASA) won't allow the mobilization of animals for the exhibition, due to the serious domestic sanitary situation.

The organism would also maintain the immobilization of the rodeos for a term of between 90 and 120 days although with some measures that will facilitate the weight gain of animals. Through these actions a sign of "seriousness" is showed to the European Union with the purpose of achieving the reopening of markets, something that at the moment seems quite distant.

New cases of swinish fever is registered in Spain
Source: Agriclipping
Date: 20-06-01

Spain's government officials confirmed six new cases of swinish fever, and informed that they are carrying out analysis to establish the origin of the illness. Before the discoveries, the official authorities prepared the restriction of the movement of pork to prevent the epidemic's expansion, after the directives of the European Union (UE) for the prevention and the handling of it, prepared the sacrifice of 18 thousand animals.

Miguel Aryans Cañete, minister of Agriculture of Spain, presented before the Veterinary Commission of the UE a report on the epidemic's situation which affects the swinish production of his country. The fear for the illness is increased in Europe. This is the third illness that affects the continent, after the losses that "Mad Cow" and aphthous generate for producers.

The swinish industry is one of the pillars of the Spanish cattle production that has just begun its recovery of a series of prohibitions that affected it due to the swinish fever of 1997.

Swinish fever is highly contagious, and its expansion is attributed to the intensive upbringing and the transfer of animals among European frontiers.

The dispute continues between Europe and United States about meats with hormones
Source: Agriclipping
Date: 20-06-01

United States' government officials and officials from the European Union (UE) were not able to reach an agreement regarding the conflict that prevents a great quantity of North American meats tried with hormones to enter the European continent.

Willy Helin, spokesman of the delegation of the UE, informed that the first meeting maintained since president George Bush's assumption, was centered on the eventual application of some type of compensation that will benefits United States' meat industry. At the moment, the limit that Europe imposes to North American cattlemen is 11.500 tons of meat with hormones with a tariff of import of 20 percent above that volume, which translates into an annual loss of 116 million dollars.

The compensation that United States seeks is based on a decision made by the World Trade Organization (OMC) which sustained that the position of the UE doesn't have scientific bases to demonstrate that the consummation of those meats is harmful to our health.

Adreani said that although the "external trade dollar" factor benefits the exportations, it can be an illusion
Source: Agriclipping
Date: 20-06-01

When referring to the impact that the measures announced by the minister of Economy, Domingo Cavallo, have on the agricultural sector, Pablo Adreani, of the consultant AgriPac, said that "in the first place all measure that aims to improve the exchange rate, produces an improvement in the exports as well". However, he warned that the external trade dollar that arises from the particular average between the dollar and the Euro, "can be an illusion, whereas clause that the value of both would spread possibly to the convergence, and then it would diminish and could end up being diluted in time."

Adreani also said that now "to the climatic uncertainty and the offer and demand that the markets experience today, the exchange is added as well". In this sense he offered as an example "what is actually happening with the markets". He Indicated that "wheat went up 2 percent, soy up near 2,5 percent and corn hardly ascended at all. The external trade dollar that on Friday, when Cavallo made the announcement, was 8%, today for wheat corresponds a 0,08%. That is to say that for the external trade outside of 8 percent for wheat, it should have ascended four times more". He also considered that it is "logical that the markets do not overturned to the theoretical exchange rate100 percent. First of all because the commodities are measured in dollars and the external trade dollar is mobile. Second of all because the markets respond to offer and demand."

On the other hand, he considered that the discount in tolls "is positive, and the increase of gas-oil's price would not affect the producer that works legally", since he/she can take as credit in the liquidation of the I.V.A. the entirety of that ascend. As for the removal of interests in the credits and of the presumed minimum rent he indicated that "they are measured expected by the farmers and favorable to production oriented to exportations."

Uruguay aims to the holando race to exit the aphthous crisis
Source: Agriclipping
Date: 20-06-01

The closing of the external markets caused by the aphthous in Uruguay, caused the interruption of the Uruguayan holando cattle commercial current toward Mexico, where it tries to place a second shipment with 1.350 pregnant cows. According to sources of this sector, the commercial strategy aims to continue promoting the genetics of that race, once it is possible to guide the control of the illness and to adapt the local production to the situation after vaccinating livestock for a second time.

Uruguay is already working in 3 or 4 potential markets. Concretely, some American countries and some European, not traditional. It also mounted an office in United States. The experts estimate that in case the promotion is effective, between August and September the exportation of Uruguayan holando animals with vaccination will be possible.

On the other hand, the same sources indicated that to achieve a good result in the strategy it is indispensable that the private operators, the producers and the official authorities operate in a combined way. As it is already known, the government made a commitment to solve the problems that can be created with some sanitary protocol of the countries that would receive the Uruguayan meat.

Monsanto will release in USA a soy bean with low-levels of saturated fats
Source: Agriclipping
Date: 20-06-01

The Monsanto company announced that it will give the results of its last investigations in soy, to US farmers. It will also share its discoveries with the United Soybeans Board (Soy Farmers Council), the organization that groups those producing this oleaginous and it will work jointly with the American farmers to develop, in a few years, better quality soy and with smaller content in saturated fatty acids.

Monsanto's last discovery is a genetic marker, a signal that makes it possible to identify in a quicker way the genes that interest the investigators. One of the advantages of knowing this type of markers is that it is not necessary to wait until the harvest to analyze the oil, since the analysis can be carried out in the same soy leaf.

This discovery supposes an important advance in soy bean investigations, since, as Monsanto explained, "the genetic markers are powerful tools that can be use to advance the improvement of new varieties. In the concrete case of this genetic marker, it will allow to advance the readiness of varieties with more quality starting from 2005, since the investigation is much quicker than with traditional systems."

This move coincides with what was announced at the end of the year 2000, when Monsanto announced its commitment of sharing knowledge and technology from all over the world with the investigators and farmers. It has put to the investigators' disposition and institutions without animus lucrandi, the complete sequence of the genome of two species of microorganisms of the floor and the first draft of the genome of the rice. This will make it possible to advance genetically in the achievement of new modified cultivation.

Cavallo will exempt bio-diesel from transfer of fuels tax
Source: Agriclipping
Date: 20-06-01

The minister of Economy, Domingo Cavallo, announced that shortly he will announce the excuse to bio-diesel from the transfer of fuels tax (ITC), in an initiative that will represent a great stimulation on the demand of agricultural products.

Cavallo urged the citizenship to trust the new package of measures again and that "when they see overseas that the economy grows again, the risk country will collapse". "it is certain that overseas they have doubts, but people here don't have to worry, the important thing is that the Argentinean people understands", Cavallo manifested at the end of a day in which the risk country went up and the external markets made their doubts be felt regarding the announcements of last Friday.

Also, he specified that in Chile and Brazil, where the local currencies were depreciated today regarding the dollar "they didn't devaluate voluntarily", but rather in the mark of a régime of variable rate of exchange, they were victims of "the same factors of uncertainty or lack understanding" that dominated the markets of Europe and the United States.

Colombia will sell bovine against the aphthous to Uruguay and Venezuela
Source: Agriclipping
Date: 20-06-01

Colombia's Ministry of Agriculture, country that recently received the certification of aphthous free area by the International Organization of Epizootias (OIE), it informed that it will sell bovine against the aphthous to the governments from Uruguay and Venezuela, through the state veterinary company, Vecol.

After carrying out a visit to the Colombian laboratories, an Uruguayan delegation expressed the interest for the purchase of 14 million dose. Both parts already confirmed the first part of the operation, conformed by 4 millions vaccines and for which Colombia will receive 1 million dollars.

On the other hand, Vecol will also remit two millions of vaccines against the aphthous to Venezuela, which detected a focus of aphthous in the state of Táchira during last days, to 800 kilometers of the capital, Caracas.

Firm interest and stable prices in Liniers
Source: The Nation
Date: 20-06-01

After the lingering recess determined by Monday's holiday, yesterday's transactions, in the Market of Liniers, had an agile and lively transactions with the validity of securities that they ratified in general the remunerative judged registrations of the closing precedent week.

With 11.141 entered heads, smaller stock than what was foreseen, the operators dedicated to supplying the Capital and the Great Buenos Aires areas intervened with apparent interest when they left the small classifications of consumption for sale, the young bulls in their diverse pesos and all the types of cows.

As it has been observed in the last rounds it was outstanding the competition when being exposed to special light groups as it puts on weight.

The Index Young bull of the Market of Liniers INC was $0,835, while the general average price of up-to-date Markets was $0,833. maximum Rates: light young bulls $0,925 for 15 animals with 409 kilos; medium young bulls $0,914 for 23 with 436; heavy young bulls $0,856 for 25 with 484; very heavy young bulls $0,80 for 20 with 513; black overos $0,78 for 26 with 537; young bulls $1,105 for 13 with 262; cows $1,11 for 42 with 261; calves $1,202 for 19 with 213; cows $0,83 for 10 with 383; bulls $0,582 for 14 with 748.

Sales details: young bulls 3732; younger bulls 1911; cows 1961; females 1811; calves 1507; bulls 127.

Perspectives for the agricultural market
Source: The Nation
Date: 20-06-01

WHEAT: Sowing advanced 27% of the foreseen area

The Cereals Market of Buenos Aires informed that, on the 16 of the current month, the sow of wheat for the 2001/2002 cycle reached up to 27% of a foreseen intention of until now in 7 million hectares. "precipitation and the high indexes of humidity complicate the installation, mainly with the traditional sowing system. In some areas, the installation in direct takes a long time for the difficulty of applying the herbicide due to the high cloudiness. Many producers will await the liberation to date of the floors that are busy with soy and corn, it stops later to face the sowing of the cereal."

The entity points out that in the present week an important advance would not take place in the sowing, especially in the center west, southeast and northwest of Buenos Aires. "It increases the abandonment of the installation of varieties of long cycle, at the time that the possibility of incorporating wheat of intermediate to short cycles grows. Potentially, and if the future climatic conditions are favorable, we reiterate that the sowed surface could be increased in some 200 thousand additional hectares to the foreseen until the moment."

BRAZIL: The energy crisis would sustain the prices

"The energy problem raised in Brazil assures a reduction in the industrial production for next months, sustaining the price of the derivatives of soy", highlighted Manuel Alvarado Ledesma, of Economic Consulate for Agriculture. The analyst explained that if the mill diminishes by 15%, the volume of flour produced would drop almost 3 million tons (25% of its exports). "That volume represents 20% of the Argentinean soy flour sales therefore the opportunity opens up for our country to win new markets and to compensate, in this way, the fall of the sale toward China, country which applies a political punishment to the purchases of industrialized merchandises."

CHINA: Benefits of the entrance to the OMC

Information coming from the United State's Department of Agriculture (USDA) indicates that the entrance of China to the World Trade Organization (OMC), foreseen to acquire by the end of this year or beginnings of 2002, it would benefit and it would impel the world trade of vegetables oils in around 2 million tons. The USDA added that this situation would produce an increase of the Chinese imports of soy oil in the order of 78 percent.

SPAIN: Important fall of cereals production

The Spanish Ministry of Agriculture estimated for this year a fall of 25,8% in the local crop of cereals regarding the previous year. For 2001 the organism foresees that the production would be located in the order of 14,73 million tons of grains, against 19,85 millions in 2000. In allusion to this reduction, the ministry indicated that the excessive humidity installed in the region in the moment of the sowing caused that the producers were limited to sow in many areas.

The new measures. Cavallo criticized the market and requested businessmen to transmit optimism
Source: Clarín, La Nación, El Cronista, Ambito Financiero (Clarin, The Nation, The Columnist, Financial Environment)
Date: 20-06-01

In front of about 500 managers, bankers and economists, Domingo Cavallo summoned the establishment yesterday to "explain" the measures that on Friday had been known. The speech was almost the same one that was listened in Olivos. But with the difference that in the means the markets had "said" with a firm fall of the Argentinean titles and one ascends of the risk country.

That "to give explanations" according to Cavallo, was necessary because the new measures had been cooked in total hermeticism. "We could not trust neither the IMF, because if it had been filtered to the market that we will apply a convergence factor, they've had accelerated the imports and delayed the exports. Only the Brazilian government knew ahead of time what was going to be announce, and they didn't say a word" Cavallo revealed.

During an hour and a half, the minister aimed towards two fronts. It criticized the markets that "they don't understand us" and it exhorted the managers to become "spokesmen of the new measures. Follow the example of your Brazilian colleagues that go through out the world with optimism and in a good mood."

The minister did not deprived himself of attacking the operators: "They insist with the magic recipes. This is people that are devoted to speak but they do not think, they have not acted in government's functions nor they know how to solve the problems. On the other hand they propose magic formulas and they attack us because we don't lower the public expense. In the year 2000 the expense went down 3.000 millions and this year it will drop another 2.000 millions. The public expense increased grossly in the last decade, like the level of indebtedness grossly went up because demagoguery was made."

Cavallo insisted that the plan is not a change in the game rules, but rather consists on making commercial politics in an adverse international situation, due to a strong dollar. He also anticipated that there will be other stages from a strategy that he baptized as competitiveness. The first one, like he had said on Friday, it will be a drastic tax reformation that will be based on two pillars, an IVA of 16% instead of the current 21% and tax to the earnings.

The minister also advanced what the new foreign policy will be. He said that since for the RAZORBILL to be summed up we are a long time away, Argentina gets ready to a bilateral negotiation of the hand of the Mercosur toward the European Union on one hand and toward United States for the other one. He/she admitted that it had taken the proposal to Brazil and that it had been well received. Plus still: it pointed out that the block will designate a special negotiator that accelerates the times. The deputy Beatriz Nofal, of the UCR, advanced that he/she is getting ready the exchange coordination with Brazil and that that it will be one of the debate topics next week in the summit agenda in Asunción.

The external trade has a new dollar today: $1,0722
Source: Clarin, Financial Environment
Date: 20-06-01

The Central Bank fixed, for the first time yesterday, the value of the new commercial dollar of Argentina in $1,0722 peso, that arises from the denominated Factor of Convergence, or FC that until yesterday was denominated connection factor. The FC will be applied to operations of external trade that are made today and it implies an additional advantage of 7,22 percent for the Argentinean exports.

It prepared this way it the General Resolution 1.030 of the Federal Administration of Public Revenues (AFIP). In the article 1 establish that the FC will be communicated daily by the Central one to the AFIP for its application "the first following skilled day". this way, the value defined yesterday today it is applied and, for example, that of Friday will be good for the purchases and external sales of Monday.

The application of the system from today implies, in the practice, a benefit for the exports and a rise in the price of the imports, also of 7,22 percent.

Formula

The daily level of the FC arises of putting into practice the outline of basket of two currencies, compound by 50 percent for the dollar and 50 percent for the euro. The formula was defined in the following way: 1 - (1+ euro/2). Yesterday he/she took a value of 0,8556 for the European currency regarding the dollar.

You also confirmed that the advantages of the FC won't be applied to a series of exports, in particular the fuels. They were out, among other goods, the precious stones and matchmaking articles.

Once the Customs receives the FC of the day, it will load the fact in the System María and it will be applied on all the tariff positions, to determine the I mount of corresponding liquidation for the exporter. In the case of the importers, it will be used so that these liquidate the corresponding sums.

The FC will notice daily according to the rate from the Euro to the 14 of London, or 10 of the morning of the Argentina. The Central Bank prepared to take the average of rate of the currency according to the information provided by three banks that operate in that London market of foreign currencies: HSBC Bank, JP Morgan Chase and Barclays.

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