Gustavo Idigoras: The Government had a need for foreign currency of US$3,000 million and we closed the month at US$3,750 million, of which US$3,150 million were with the soybean dollar. Although it was a complex month, it was also productive for those who still had soybeans because values above the region were paid in Argentina. It was the first time in 10 years that not only was it paid without withholding, but it was paid in excess of withholding. The producer who was able to do it felt quite satisfied and the Government too, because it needed two things: foreign currency to meet the IMF goals and have reserves to face a complex 2023 and, on the other hand, tax collection, because let’s remember that one of the goals was to achieve a 2.5% deficit and that was also achieved by the additional income from export duties.
Q.: How do the drought and the inflow of dollars impact the rest of the economy?
IG: The drought that we are going through is going to lead to the fact that, when one wants to change a cell phone, a notebook or a television or wants a spare part for a vehicle that is imported between February and May, they cannot find it. Not because the manufacturer doesn’t want it, but because the dollars won’t be there to buy them. There was a drought and there will be no corn to bring in the dollars that Argentina will need. There is a very direct relationship between the countryside and the economy that sometimes society, especially urban, does not visualize. If the country experiences a drought, we all suffer it and, if it has a good harvest, we are in a position to grow. We have just closed the best year in history, with agro-industrial exports of US$40.5 billion, well above the US$25 billion average.
Q.: Why, despite the fact that the sector contributed more, is it not enough?
IG: Because the macroeconomy is not stabilized and other sectors are not in a position to export. And, furthermore, because for 100 years we have continued to depend on the climate. We have not been able to develop other sectors outside of agro-industrial. We hope that liquefied gas, oil or lithium can contribute because Argentina’s agriculture needs Vaca Muerta to work so that the day comes when withholdings are eliminated because the fiscal need will be significantly reduced due to the inflow of foreign currency and payment taxes from the oil sector.
Q.: Are you still worried about the idle capacity in the industry?
IG: This is a central and critical issue because it has macroeconomic effects for the country. Our soybean production has been stagnant for 10 years when it grew 35% in the US and 100% in Brazil, because the world demands more flour and oil. In Argentina we lost the same amount that the country owes to the IMF just because of the lack of growth in soybean production. But the idle capacity means that we have a lot of internal costs to cover and no stocks, and when soybean sales are anticipated, as happened now, what will happen at the beginning of the year will be an extremely low sales rate situation. It will be a complex summer because due to the drought we lost 10 million tons of wheat, of which between 6 and 7 were for export, but we also lost prime corn, which was 8 million tons of exports that covered the need for dollars between March and April. We are crossing our fingers so that the rainfall regime is good and we have soybeans that, even if they are late, can be planted in the largest possible area, but in the meantime, we are going to have four hard and critical months due to lack of merchandise and that It will have a strong impact on Argentina. While this is happening, Brazil is going to have a record harvest and is grinding more and more. The United States discovered a new biodiesel that fully replaces diesel, which is hydrogenated oil and will have flour left over to sell, which is precisely what Argentina sells. The world is moving while we are stagnant.
Q.: What is your perspective on what is happening in the rest of the world?
IG: We are in a very unstable world. Argentina does well when the world stabilizes, because it eats more, because it has more income and asks for more Argentine food. So the banks (outside) want to lend us money. When there are wars, instability is generated for reasons exogenous to the supply and demand of food production and marketing. All this has a great impact because the financial cost for companies that export grows. We are going to see what happens in the region with the assumption of Lula and if indeed Mercosur is strengthened. Argentina urgently needs a Brazil with a lot of energy that will drive and help us move forward.
Source: Ambito
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