The future implementation of “agro dollar”, that in his first stage will understand a differential exchange rate for the soybean complexwill represent the possibility of a improvement in the profitability of producers ahead of a drought-stricken crop and for those who they still have 7 million tons from the previous cycle in his power.
On Thursday, the Minister of Economy, Sergio Massa, announced the prompt implementation of an “agro dollar”, which will include, in the first instance, a differential exchange rate for the soybean complex for 30 days during April.
He also announced that a special exchange rate will be implemented for some productions of the regional economies for 90 days, although still There are no known specifications which activities it would include, nor at what price the dollar will be located.
That last point is also unclear to what might be called a “dollar soybeans 3”, although an improvement in the exchange rate is taken for granted invite producers to sell their holdings already the agro-exporters to increase foreign currency settlement.
According to the commercial analyst of the consultancy FyO, Josephine Jollyfrom the 2021/22 soybean campaign, which closed with a production of 43.3 million tons, 7 million tons still remain to be sold.
For Jolly, the oilseed to be negotiated would come from that remnant and what could be obtained of the current campaignwhere the harvest is just beginning.
However, he stated that “we have to see how far the measure goes, because If it extends for 30 days in April, in many cases, because of how it was sown this year, the harvest will be closer to May and that soybean would not enter. That is an issue,” said the analyst.
According to Rosario Stock Exchange (BCR)the current soy campaign would total 25 million tons, the lowest production in 23 yearsdue to the strong impact that the drought in a large part of the country, but especially on the core zonethe area that contributes the greatest volume nationwide.
that important loss of 17.2 million tons Compared to the previous cycle, it will represent a drop of US$ 7.3 billion in exports, the stock exchange indicated.
To this is added that Soybean marketing this season is at its lowest level in the last 20 years.
In this sense, the BCR reported that “4.8 million tons have been sold, slightly less than half of what was sold in the last campaign to the same date. In terms of percentage of expected production, commercialization reaches 18%, when last year it totaled 24%and represents the lowest proportion since the 2016/17 campaign”.
That’s why youan improvement in the exchange rate can be an incentive for not only market the remaining volume of the 2021/22 harvest, but also iboost sales of the new campaign.
Thus, the person in charge of the Market Analysis area of the Grassi brokerage, Ariel Tejeraconsidered that “although producers prefer clear rules and certainties, in markets without interventions, clearly, an improvement in the exchange rate, even if temporary, should generate stimuli”.
“Also, we are in a cycle where the producers are going to need to make cashand with a production of corn very diminished first, the alternative may be to market soybeans, to pay costs. In any case, the decisions will be closely related to the differential exchange rate that is actually determined,” added Tejera.
According to the specialist, “if we consider that the differential between the soybean dollar and the official exchange ratein earlier versions, hovered between 35-39%we could think in values for April located between $285 and $300 for the new dollar”.
Another central point to take into account is the low level of liquidation of dollars by agro-exportsan issue that seeks to stimulate the future measure.
The Chamber of the Oil Industry and the Center for Grain Exporters (Ciara-CEC) reported that during March entered 1,228.6 million dollarsthe second lowest March since 2020, although 90% higher than in February 2023.
In February, US$645 million entered, 30% less than what was settled in January, product of the sharp fall in the production of wheat and corn of primera.
In sum, agricultural exporters liquidated 2,802 million dollars in the first quarter of the year.
Source: Ambito
