Porky pong gets Chile in a stink
The Chilean government has declared a health emergency and temporarily shut down the world’s biggest pig farm.
Why? Locals raised a stink – about the stink. Continue reading »
McCain Argentina: not frying tonight
The chips are down. Canadian frozen fries company, McCain, has temporarily halted production at its plant in Balcarce in the province of Buenos Aires. To blame is a simmering trade dispute between Brazil and Argentina that has flared up again this month.
McCain prides itself on being the chip purveyor to Mercosur from its $140m Argentine plant, that can chop, fry, freeze and package 27 tonnes of potatoes an hour. Yet Mercosur’s appetite for free trade has been in doubt for a while. If Brazil, the region’s biggest market, isn’t buying frozen chips, something must be seriously wrong. Continue reading »
Argentina’s growth looms over restructured debt
Earlier this year, Argentina’s GDP warrants – which were issued to sweeten a debt restructuring that offered investors a brutal buzzcut rather than just a haircut – had risen nearly 50 per cent and were a hot investment prospect.
Fast forward a few months and those same warrants were at their lowest ebb in nearly two years.
Why? Well, Argentina’s growth prospects this year are heading south. Fast.
Argentina and Brazil discuss hiking Mercosur tariff
Charity begins at home.
Argentina and Brazil, the two most protectionist nations in South America – actually, two of the most protectionist in the world – have discussed an Argentine proposal to hike the common external tariff of the Mercosur trade bloc to a whopping 35 per cent from 22 per cent now. Why? To keep out pesky imports from Asia or the European hunting for markets amid recession in many western countries.
Argentina: pressure mounts on the peso
“Have any of you ever seen a dollar?” It was an ironic phrase uttered by Juan Perón, Argentina’s famous former president, early in his first presidency in the 1940s.
For Argentines today, getting their hands on dollars has become a titanic task. Everyone, it seems, has both seen them and wants them. But virtually none are to be had, thanks to tighter currency controls in place since last week, in which most applications to buy dollars (a requirement since last October) have been rejected. Continue reading »
Argentina: lower growth ahead
What is normal in Argentina’s economy? Spectacular crisis has been a regularly recurring feature – think of the hyperinflation of the 1980s and the default and crash of 2001.
Spectacular growth – an average of 7.8 per cent from 2003-2011, according to the central bank – has been the new normal for the last few years. But there are signs the breathless pace is slowing. Continue reading »
Argentina: nationalising electricity?
What do you get if you freeze utilities tariffs for a decade? As Argentina is now discovering, the result is electricity companies – the big two are Edenor (controlled by Pampa Energia), and Edesur (controlled by Italy’s biggest utility company, Enel) – on the brink of collapse.
That has raised the question in many minds of whether, after the nationalisation of YPF the government now has the electricity sector in its sights. Continue reading »
YPF: more like Norway’s Statoil
Miguel Galuccio, the newly appointed boss of Argentina’s newly nationalised YPF, is a man with a plan.
Within 100 days, he promises to have ready a five-year plan, complete with production and exploration goals. The aim, according to pro-government newspaper Tiempo Argentina, is to turn YPF into a kind of Argentine version of Norway’s Statoil. Continue reading »
Meet Miguel Galuccio: YPF’s new boss
So YPF is now officially expropriated. Cristina Fernández, the Argentine president, on Friday night promulgated the law nationalising 51 per cent of the oil company – critics call it a confiscation from Repsol of Spain – and put a new figure in the top job.
Who is this man with the titanic task of delivering on the government’s desire for instant results – higher investment, higher production, deals with foreign partners to develop Argentina’s massive shale resources, and a return to energy self-sufficiency, pronto? Continue reading »
FDI in LatAm: good news and bad news
Last year was a great year for Latin America attracting foreign investment – a new report published by the UN’s Economic Commission for Latin America and the Caribbean found funds coming into the region hit a historic high of $153bn, representing 10 per cent of total global flows.
The 2011 figure is a 12 per cent increase on the previous record of $137bn in FDI to the region, set in 2008. Even better news is that ECLAC predicts that amount “could be exceeded this year”.
But the downside is that, despite the rate at which money is flowing in, multinational companies are also repatriating profits speedily. Continue reading »
Argentine province looks to IPO
Undeterred by Argentina’s nationalisation of YPF (due to be voted into law on Thursday night in Congress), which has sent shivers down the spines of many investors, the provincial hydrocarbons company in Neuquén, the heart of the country’s hoped-for shale revolution, is preparing an initial public offering.
The province says it expects to list Gas & Petroleo de Neuquén in Buenos Aires within 60 days. Continue reading »
Argentina: Repsol strikes back
Photo: Bloomberg
Repsol, the Spanish oil company whose majority stake in Argentina’s YPF will be expropriated by law this week, has taken some revenge, it seems – hitting Argentina where it will hurt as the southern hemisphere winter approaches by blocking a shipment of liquefied natural gas. Repsol had contracted 10 cargoes of LNG and if they are all scrapped, that will leave a big hole to fill. Continue reading »
Argentina: raiding its own pension fund
It’s not a licence to print money, exactly. But Argentina’s habit of shuffling dollars around the public sector to meet its financing needs certainly comes in handy for a government that has few ouside funding options.
Take this week, for example. While the nationalisation of Spanish-controlled oil company YPF was still hogging headlines, Argentina’s economy ministry tapped $3.1bn from the central bank and pensions agency, bringing to some $4.3bn the amount it has borrowed from state bodies so far this year, according to this report. Continue reading »
LNG: Repsol’s ace in the hole?
Winter appears to have come all of a sudden in Argentina, and low temperatures generally mean one thing: a scramble for gas. The nationalisation of YPF could throw a further spanner in the works, since Repsol won key contracts this year to supply Argentina with liquefied natural gas during the winter. Those contract are now in doubt. Continue reading »
Argentina and Big Oil: lots of noise but no money yet
It’s a busy week for Big Oil in Buenos Aires. The Argentine government, which has seized control of YPF from Repsol of Spain and is in the process of nationalising it, has been calling international oil executives in to hear their investment plans. It wants big ticket announcements, fast.
The government doubtless wants to portray any alliances as love matches, with the private oil majors embracing the new-look YPF and endorsing government control. In reality though, any deals are more likely to be more coldly calculated marriages of convenience. Continue reading »
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