Behind the sharp decline in the exchange rate gap product of the Government’s new exchange rate scheme, Nicholas Pinopresident of the Argentine Rural Society (SRA) spoke about the “caution” of producers and how it affected grain marketing. Once again, he reiterated the need for a single exchange rate.
“With a gap of more than 50%, The producer becomes more cautious when selling the grains. Simply because When the value of a dollar x increases, the costs of inputs go hand in hand with that. Is a logical action of anyone to protect themselves in the midst of a situation of uncertainty. He producer does not speculate, What is certain is that, in the event of any shocks, it takes care of its reserves, which are in grains and meat, and it tries to sell as little as possible,” he said on Wednesday in La Rural.
“It is normal that only the minimum amount of goods is sold to get through the moment and cover expenses,” he added. According to private estimates, producers have between 13 and 16 billion dollars stored in silobags.
Despite this, he indicated that sales are being made in the usual way, respecting the percentages that have been seen in recent years and that “surely this month and August will be more prudent months, but then in September, When you start planting strongly again, a more important sale begins again.”
In another interview, he said that, as President Javier Milei said, he is clear that the first thing the new administration will do is eliminate the restriction and then begin to remove the withholdings.
“The Government sets the times and they are responsible for ensuring that, hopefully, things happen faster than expected. one foresees or one can expect”said the SRA director.
The producers’ complaint
The Confederation of Rural Associations of Buenos Aires and La Pampa (CARBAP) He warned today that producers suffer great economic damage when they have to sell their grains at the rate of the dollar they must use and demanded that a solution be found because this situation causes “a great distortion of the market.”
In a statement, CARBAP also said that the Buenos Aires Grain Exchange and Matba-Rofex “in a remarkable initiative, began to publish daily the indicative value of the dollar for the export sector, according to the formula 80% to the BNA dollar and 20% to the CCL dollar (called the blend dollar), a mechanism established for the settlement of exports by the Ministry of Economy as of 12/12/2023, which generates a higher price than the BNA or official dollar.”
Furthermore, he highlights that these mechanisms, in their different formulas, what they did was include “a new distortion in grain trade, In this case, in dollar contracts, especially in the so-called forward contracts, since they end up being settled at the official dollar and NOT at the value that the exporter actually receives at the time of settling their foreign currency (Blend 80/20 dollar), causing a significant economic loss in the price received by the producer.”
“This distortion, exploited by the purchasing sectornot only harms the producer economically, but also removes predictability regarding logistics at the time of harvest. Rarely, almost all exporters operate in the same way, offering contracts only at the official Banco Nación dollar and not at the blended dollar as it should be, since it is customary for the producer to receive the same type of dollar that the exporter receives,” he points out.
“From CARBAP we urge the parties involved, and especially the purchasing sector, to respect the current rules for the settlement of exports in dollar contracts“Yes, not only for new contracts, but also for those previously made and which must be fulfilled now during the harvest,” the agricultural entity stated.
In addition, they warn that the new “Exporter Dollar” index published by the stock exchange and the MATBA-Rofex could “be used to convert these contracts into pesos in a transparent manner, until the exchange rate is unified.”
Source: Ambito
