He agriculture Uruguay was one of the first to give warning signs about the effects that the dollar depreciation would have on the competitiveness of the sector last December.
So, with a loss of 10.65% of the value of the currency in the year, the field did not face the impact of the historical drought which, currently, has jeopardized the harvest of soy and cornand also affected the livestock market.
Although estimates show that it will only be possible to accurately quantify the ravages of the drought in the Uruguayan economy in the second half of the year, there are data that are clarifying a bleak outlook for the sector that was the engine of the record exports registered by the country in 2022 (13,356 million dollars).
As an examplethe soybean harvest hardly exceeds one million tonsaccording to agricultural businessmen consulted by scope.com. Uruguay has been planting just over one million hectares, with an expected average yield (in a normal year) of between 2.5 and 2.8 tons/ha, so that an expected “normal” harvest would be 3 million tons. . This year, not even a third of that volume will be reached.
Meanwhile, the production costs in farms per hectare they were between 450 and 500 dollars, according to Calmer data.
In this context, the claims for the depreciation of the dollar, which accumulates a drop of 3.66% in its price so far this year, were put back on the table.
What is the value that the field claims for the dollar?
The agro-export complex issued a harsh statement last December demanding that the Central Bank of Uruguay (BCU) the end of the contractive interest rate policy, which is the way in which the government has decided to deal with the problem of high inflation (7.55% annually in February). Then he placed in 12% exchange rate delay.
Since then, different representatives of agricultural entities have held meetings with both representatives of the BCU and the Executive of Luis Lacalle Pou to raise the blow to the competitiveness of the sector that brings with it the appreciation of the peso.
Gonzalo Valdespresident of the Rural Association of Uruguay (ARU), updated the value of the exchange rate delay by 25% in a recent interview with La Mañana.
“At the producer level, the drop in purchasing power has been very large. You have to calculate that deviation of 25% delay plus inflation. With that number, the purchasing power of those of us who have to sell dollars has been greatly reduced, ”he explained.
Thus, a desirable price of the dollar for agriculture would be around 48.31 pesos, based on the closing of the currency on Friday at 38.648 pesos.
The figure far exceeds the value estimated by the market in the last Economic Expectation Survey of the BCU, where the agents consulted projected a dollar at 41.50 pesos at the end of the year.
Instead, it is close to that calculated by The Economist based on to the Big Mac Index who suggested that Uruguay should have the dollar at 50 pesos.
Source: Ambito
