The numbers speak clearly and leave no room for speculation. The agro-industrial sector estimates that product of the drought the drop in foreign currency income for this year will exceed US$18.7 billion, only if the lower production of wheat, corn and soybeans is considered, and associated with it is added the drastic decline that oilseed milling is already experiencing, which in practice is the country’s main source of foreign currency. Simply put, fresh dollars are missing.
From this scenario, the Central Bank fails to accumulate reserves in a context, moreover, in which it must face payments for energy imports and after avoiding speculative maneuvers with financial dollars. A complex cocktail that gets just a bit of air with the so-called soybean dollar and agricultural dollar for exports from regional economies.
In this framework, from the Government they emphasize that the real need for genuine dollars led the economic team led by Sergio Massa to deploy all the alternatives at hand. First, with the execution of the swap with China that will allow that imports of products from the Asian giant are executed in yuan. This is not a minor fact, since, for example, glyphosate and other key agrochemicals for agriculture come from this country. In this way, the Government ensures the availability of critical inputs for the field for the next wheat harvest.
Something similar happens with the pact that seeks to close with Brazil which, through funding, could entail the payment of imports with reais. Added to these negotiations are the talks with the IMF to advance disbursements. In its favor, the Government has official statistics that clearly show the productive disaster that the main productive areas of Argentina had to face.
On the other hand, in the private sector the data coincide and are even more detailed. According to the latest survey of the Chamber of the Oil Industry of the Argentine Republic (CIARA), considering only the three main crops in Argentina, the drought took 50 million tons. This represents a decrease of 43% in the volume of production. Estimates detail that the drop in foreign currency income can be estimated at US$18,777 million, considering the lower production and exportable balances, taking as a reference the FOB price of exports on April 24. Only in the first quarter of this year, foreign currency income (USD 5,237 million) showed a real drop of USD 5,861 million compared to the same period in 2022 (USD 11,098 million).
Going deeper into soybeans, the productive and exporting cluster that contributes the most foreign currency to the local economy, it can be seen that the drop of almost 20 million tons in the harvest (42.2 million in the 2022 cycle to 22.5 million in 2023 -last estimated by the BCR-), is having a full impact on the supply of grain available from the early harvest.
In turn, in the first quarter of 2023, soybean milling decreased by 2.54 million tons compared to 2022 and fell 3.92 million tons compared to 2021. This is the worst milling record in recent years. 20 years.
soybean dollar
Meanwhile, closely related to the lack of grain available from the early soybean harvest, since basically in the core zone the lots that were planted first were lost due to lack of rain, the tepid soybean dollar performance.
Since the implementation of this differential exchange rate of $300 per dollar, which began to apply in the second week of April, agro-export companies liquidated around US$1.8 billion, with quite fluctuating daily operations. It is that the various rumors that circulated in the market and that were flatly discarded by the Government slowed down the expected income of dollars, to this was added the real lack of grain to sell. However, this Thursday they received US$153.4 million, the highest amount since last April 21. As indicated in the market, the certain calm shown by the dollar, added to the advance of the harvest, would explain this phenomenon.
Forward Agro-exporting companies anticipate that until the end of May around US$3,000 million will enter just for the soybean dollarwhile the regional economies until the end of August would liquidate between US$3,000 and US$4,000 million.
Source: Ambito
