:quality(85)//cloudfront-us-east-1.images.arcpublishing.com/infobae/HV3HR2OY2JEIPJ5YGIULGFYMFU.jpg "The purchase and sale of fields also affected by the drought: in January the activity fell by almost 20% 1")
The monthly report of Argentine Chamber of Rural Real Estate (CAIR) reflected that last January the “Rural Real Estate Market Activity Index” registered a decrease of 15.75% monthly, due to seasonality during the summer months, but also due to the drought and the political and economic situation in the country, which imposes uncertainty on decision-making for the purchase and sale of fields.
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The Secretary of Agriculture gave an exclusive interview to GlobeLiveMedia. He spoke about the current situation of the agricultural sector, its relations with the leaders, the possibility of launching a new soybean dollar and the measures that have been taken to contain the avian flu and the drought.
In the activity survey at the start of 2023, the CAIR indicated that the index had fallen to 18.99 points. It should be remembered that the “Rural real estate market activity index” is a monthly index which reflects the “activity” of the market. A maximum baseline of 100 points is taken, corresponding to the peak of maximum historical activity. It does not reflect prices/values, only market activity. The measurement started in November 2013.
Jose Maria Bauzapresident of the entity, assured GlobeLiveMedia that “the activity of the rural real estate sector closed down both in December 2022 and in January 2023. The drop is seasonal, since it is when the personnel of the sector takes vacations.When concluding the sale of agricultural or livestock property, this can influence the mood of the buyer but not the investment, because those who choose to invest in the purchase of Land have a twenty-year view for the time of ownership of the land they acquire.Therefore, we understand that these things go beyond the weather situation.
Regarding the realization of an investment, the President of the Chamber assured that due to the economic and political situation in Argentina, “without a doubt, we have several obstacles. But, considering the value of the land, it has been reactivated. And among the obstacles, we see access to the foreign currency necessary to carry out the operation in an election year. There is the demand of those who want to anticipate a change, and there are also those who do not want it. Opinions are divided.”
In terms of values, Bauzá commented that “in the agricultural segment there is demand and it has been possible to recover the values in the last twenty months, although not at the prices reached in 2011, but the losses have been recovered enough. In the case of cattle fields, it has also recovered but more slowly”.
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This was reflected in the latest Austral University survey. The sudden drop in the wheat harvest and the almost irreversible damage to early soybeans and early corn due to the drought have an impact on the economic situation
Among those who sell today, as the boss of CAIR explains, “for agricultural fields of 100 to 300 hectares, there is the question of drought as a headache and there is the interest of neighbors, contractors and collectors. It is the people in the sector who buy. For those who buy between 500 and 1,000 hectares, there are people who want to keep their capital safe. There is volatility and land is an interesting store of value”.
Asked about the tone that will be used when negotiating the next agricultural contracts After the severe drought that reduced the financing of a good part of the production, Bauzá commented: “The numbers are not closed. But with the panorama we have, the situation does not look rosy. It is to be expected that the drought will affect a little but we cannot speak of percentages or areas, although there is a decrease, there will be.”
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“Usually the contractor or owner has a work cushion. But this year it has dropped a lot. This may lead to negotiations. But the execution of the contracts has not yet started, and it would start at the end of March, in April or May. The settler or the entrepreneur, they are always moving forward, they are thinking ahead, and I tend to think they won’t go up but I don’t think they will go down either,” a- he concluded.
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