The settlement of agricultural currencies had a boost last December thanks to the devaluation and the possibility of entering 80% of the total at the official exchange rate and 20% at the CCL, which was established by the government of Javier Milei. In this context a few days before the end of January, according to the projections of agricultural market analyst Pablo Adreani, the income of dollars from the countryside in the first month of the year would be around US$1.4 billion, which represents an increase of 50% year-on-year.
The truth is that although this figure marks a recovery compared to the fateful 2023in January of last year the foreign exchange income from agriculture was barely US$929 million, but it is still very far from the value of 2022 when it had reached the US$2.4 billion.
One fact to take into account is that in the second half of January of this year, a slowdown in the income of foreign currency from the countryside began to be evident. The fall in international prices, together with the jump in the gap between the official dollar and the parallel ones, largely explain this phenomenon.
Going forward, a variable that can reveal how the income of foreign currency from the countryside would continue is the early grain sales by the producers. More specifically, with regard to corn sales, a sharp drop is evident from last December’s peak.
grain sales
According to the consulting firm Fyo, “corn businesses from both campaigns fell in the last week, mainly those of the new one. Meanwhile, it is already the fourth consecutive week that they have fallen, and they were reduced by almost 50%. Sales of the new one were about 392,000 tons, of which more than half – about 210,000 tons – were at a firm price.”
This information is important, because corn dollars should be the first to arrive in the coming weeks, while those of soybeans could begin to become evident towards April.
In turn, in the week ending January 17, Soybean sales for the old campaign decreased by 47% during the weekwhile those of the new one increased in almost the same proportion.
In this regard, the economist Salvador Di Stefano details: “As long as prices remain low, the producer will delay liquidation waiting for a price increase that will improve profitability, or eventually an improvement in the exchange rate that will liquidate past costs.”
Regarding the liquidation starting next April, the economist advances: “50% of the soybean harvest or a little less could be liquidated in the months of April, May and June, the rest will be liquidated over time. In corn, 25% would be settled in that quarter, the rest later. On the other hand, there is an unclear climate forecast for the 2024/25 campaign, therefore, savings in merchandise will weigh on producers’ decisions.”
Source: Ambito
