Market-friendly, pro-agriculture opposition candidate Mauricio Macri surprised Argentina with his strong performance in Sunday's presidential election, forcing a run-off with the ruling Peronist candidate.
Daniel Scioli, the handpicked successor to President Cristina Fernandez, boasted a lead of around 10 points in polls leading up to election day, but the ballot box told a different story with the two running neck and neck.
With 97% of the votes counted, Scioli boasted 37% support, while Macri had 34%. The election will now go to a second vote on Nov. 22.
Both candidates have vowed to revert the restrictive economic and trade policies of the current administration that have cut into farm margins over the last decade. They have both committed to devalue the peso, which has been kept artificially strong for years, as well as roll back the capital controls, the export taxes and the export licensing schemes that have stymied the sector.
But while Macri has committed to start stripping all this away from day one, Scioli has said he would take a more measured approach, slowly clearing many of the controls but not necessarily all of them.
If Macri were to devalue and slash taxes on Dec. 10, when the next president takes power, Argentina could unleash on the export market the estimated 10 million metric tons (mmt) or more of soybeans that is currently stored in bins. But the reality is that, given the delicate state of Argentina's foreign currency reserves and government budget, it seems likely that Macri won't be able to be that radical.
Still, his commitments mean that Macri has the broad backing of the farm community.
The question is now whether he can capitalize on the momentum created by his surprise showing in Sunday's poll and the stunning victory of his ally, Maria Eugenia Vidal, to become governor of Buenos Aires, the province where a quarter of Argentine's live.
It all depends on the 5 million people who voted for Sergio Massa, the third main candidate in the presidential race. Massa was deeply critical of the Fernandez administration and is perhaps closer to Macri in outlook. But Scioli's promise of a measured move to pro-market policies could still hold sway.
These are interesting times in Argentina.
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