Gustavo Idigoras: We had a very positive first week in terms of sales flow, with 4.3 million tons, something that is a historical record. During the entire month of August we received 1.8 million, as if to make a comparison. In terms of foreign currency income -the most important thing for the BCRA- we reached US$2.2 billion. In one week, the settlement of a full month was achieved. Now we will see how the rest of the month evolves.
Q.: Did the measure that was taken in Argentina have a global impact?
GI: Yes, surprisingly, because in general what happens in Argentina during September, October or November does not affect international prices. This is the date of what is called the “climate market of the United States” at the time of the campaign, however, given this measure by the Argentine Government, from Chicago they look at the sales behavior of producers every day and that impacted the decline in the market. There was a larger flow, with an unexpected volume for the world market. Now the world knows that Argentina is going to be able to export more flour, more oil, more biodiesel and more soybeans, so the market anticipates this flow in the coming months and prices drop a little. We had anticipated to the Government that there could be an international effect, but beyond that we highlight the income of dollars that are so necessary.
Q.: Why do you think an agricultural sector was very critical of exporters during the first week?
GI: Some referents or supposed representatives said that this was not going to work and that it was crazy. They talked about failure. I think that position, giving opinions from the desk is easy, but when you are in the market, you realize that very few producers listen to those people who speak every day, because clearly the producers made sales decisions. Those who criticized made theoretical calculations from their office, without taking into account the Chicago ratio, the Argentine premium, the position of the shipments, the number of ships, the logistics costs. They made calculations as if they lived in New York and sold in Chicago.
The market price is the bid between bidders and buyers. It started varying and went from $72,000 to $68,000. I know exporters who offered $67,000 and no one answered the phone. They had to pay $69,000 to buy it. This is the market and I think it is the best, because we are a sector that asks that the state not intervene, but if we do not like how the market works, we end up asking it to do something to correct it. It’s inconsistent. If we are convinced that we can grow, move forward and produce more without state intervention, we have to defend that at all times.
Q.: Did the industrial panorama change after the greater entry of raw material?
GI: We were very concerned because we have open export programs with sales commitments and that can never fail, because falling into default with a contract is worse than doing it with a debt, they never buy from you again and they will buy from Brazil or the United States. Now the flow of sales has improved and gives us a different dynamic in the ports.
Q.: How much more could you process with the current installed capacity?
GI: In our factories, 67 million tons can be processed when local production is 44. If we make an average, we could process between 5 and 6 million tons per month, but even with the storage capacity that exists, it could be increased a little more. With this scheme, soybeans are being purchased in September, but there will be different delivery times during October and November for logistical reasons. In fact, we had some complaints from community leaders in the port area for the number of trucks. This is part of the economic movement, because more trucks is more work.
Q.: What would be the ideal trade scheme for the producers, the industry and Argentina?
GI: The ideal is that scenario in which we have a single exchange rate, because whoever sells something that is tied to the dollar value -such as soybeans, corn or wheat- then has to replace supplies. So, if its purchasing power is not equal to its selling power, either it reduces production (less investment) or it tries to store it as long as it can until it sees whether or not there is a devaluation process. The best is a single exchange rate and that it is predictable over time. In Argentina we live with many exchange rates and that is not good. The government knows this, Massa himself told us in various meetings, but there is also a reality to manage given the BCRA’s lack of reserves. Last week was one of the best in recent times, but it’s not enough either.
Source: Ambito
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