During the second quarter, the maximum liquidation of agricultural exports will occur which, on the one hand, will generate an air of the recession that the economy is experiencing but, on the other, will boost the coffers of certain Argentine companies.
After the record drought from last year, the harvest of 2024 is one of the events most anticipated of the country’s economic outlook. It is that the strong recession which was evidenced by the chainsaw applied by the Government of Javier Milei, and the strong liquefaction of salaries and pensions, It could have some air with the liquidation of agricultural exports, which would generate positive numbers in the industry in the face of the retraction of most sectors.
According to Buenos Aires Stock Exchangethe agricultural exports This year they will be around US$32,095 million, US$9,144 million more than in the 2022/23 campaign. Even according to the projections of the Rosario Stock Exchangethe agro-export complex This year it will leave the State some US$6.7 billion in terms of export duties.
In this situation, it is important to analyze which companies will benefit during the liquidation of the farm and how investors can capitalize on these profits.
“Argentine agricultural stocks look attractive, not only because the heavy harvest has started, but also because the perspective for the sector from the point of view of exchange rate unification that would improve its competitiveness. In addition to the local opening to foreign investment and a possible reduction in export duties in the medium term,” they said with this medium. Consultant Mariela Brandolin next to Fynx Global.
As for what actions to choose in this contextBrandolin expressed: “Some companies which we can access from the S&P Merval are Agro and Cresud Mills, (the latter can be accessed in pesos, or through its ADR). AND Adecoagro and Bioceres such as Cedears (these instruments also allow exchange hedging through the CCL dollar).
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Investments and gross harvest: what stocks to choose
The anticipated arrival of the thick harvest awakens expectations in Argentina due to the currency flow that accompanies this period and companies linked to the grain export sector are the main beneficiaries of this impulse. In dialogue with this medium, Marianela Gayásenior analyst Research at SJB explained: “Taking into account those papers that are listed on the Argentine stock market, it can be highlighted Agro Mills (MOLA), positioned in the ranking of agro-export companies according to the Rosario Stock Exchange.
Another company that he considered relevant to highlight is Cresudsince it is “a leader in the agricultural sector in South America and a current member of the S&P Merval index, reflecting the importance of its operated volume, in addition to being a role used by traders to capture returns related to agricultural commodities”.
Gayá also gave some keys to take into account: “It is important to highlight that The increase in the supply of dollars leads to an appreciation of the exchange rate, particularly the cash settlement (CCL)since exporters are obliged to settle 80% of their invoiced income through the official market and 20% through the CCL. This appreciation would tend to keep the exchange rate gap at low levels as is currently observed.“.
In this regard, he explained what could happen if a strategy is adopted carry trade which is usually used when the exchange rate is fixed: “These maneuvers are usually popular while the liquidation flow persists. However, It is crucial to consider the risk associated with this strategy, given the potential impact of political factors on the exchange rate. and the possibility of lifting exchange restrictions”.
Source: Ambito
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