The fall in the price of crude oil added to the decline in recent months of the value of liquefied natural gas (LNG), which reached levels below $3 per million BTUs and the fall in demand from Asia due to coronavirus complicates Vaca Muerta. The breakeven (the value that allows recovering the investment) of Vaca Muerta is between $35 and $40. If the current price level is maintained, the scenario is compromised. With these values, it is more convenient for Argentina to import gas than to produce it, and it slows down any export project.
Argentina has an unemployment level bordering on 10%. For the second quarter of the year, 8% of employers expect to increase their staff, 4% anticipate a decrease and 80% will not make changes in their team. The Net Employment Expectancy (NEE) calculates the percentage of employers that predict an increase in their staff, subtracting the percentage that expects a decrease in their team in the next quarter. The result was 4%, which seasonally adjusted is 3%.
According to the decree, a nominal value of $68.8 billion is set, or its equivalent in other currencies. The measure authorizes the Minister of Economy to renegotiate with creditors. The decree does not include debt tranches contracted with the International Monetary Fund (IMF), for $44 billion.
Despite the high volatility in Argentina and the region and the fall in consumption, Arcor reduced its losses by 90% in 2019, according to the economic balance sheet. The Argentine company, dedicated to the production of food for mass consumption, agribusiness and packaging, had a negative result of 144 million pesos ($2.3 mn), in 2018 the loss had accumulated 1.555 billion pesos ($24.9 mn).
Amid a 25% drop in the price of oil and a collapse in world stock markets, soybean and corn prices also fell in the Chicago market, although in a more subdued manner. Soybean contracts in March fell 2.2% to $317.28 per ton, and May contracts fell 2.38% to $319.67 per ton. Corn retracted 0.8% and closed at $147.34 per ton, while wheat rose 0.2% to $191.89 per ton.