In these conversations with the City it is revealed that the economic program is sinking in a sea of pesos, and that they are going to ask the IMF for forgiveness, although that is no longer enough. what will happen to him Dollar Agro? Will the Government be able to collect what is expected? Is there as much soy available as you think? Investors today are wondering what is the best way to protect themselves from inflation. The answer: bye carry trade.
Journalist: How is the Agro Dollar doing?
-The soybean dollar I managed to collect US$7,580 million, the soybean dollar II collected US$3,036 million, and the collection expectation of the soybean dollar III is US$9,000 million, distributed as follows: u US$5,000 million soybeans and US$4,000 million from the regional economies.
Q.: Can it be achieved?
-We have US$668 million in 4 days, but we believe that the goals set by the Ministry of Economy will be difficult to achieve. On the other hand, if the goals are met, the amount of money issued could destabilize the price of alternative dollars.
P.: It’s not good for you…
-Issuing pesos for a dollar at $300 to finance exports at a special dollar, and paying imports at a dollar in the throne of $220 is a loss that is difficult to overcome, especially when said loss is financed at rates of 78% per year and effective 112.9% per year (for now and only for now, since the BCRA will have to raise rates soon).
Q.: How is the fiscal deficit goal coming?
– Unfulfillable, a deficit that was expected at 1.9% of GDP, and will surely be 3% of GDP. The soybean crop perspective dropped to 23 million tons, when a year ago 43.3 million tons were harvested; In the case of corn, the harvest perspective dropped to 32 million tons when a year ago 51 million tons were harvested.
Q.: Is there little soybean to sell?
-Much less than what the Government believes and the Ministry itself states. Erroneous calculations are being made due to ignorance of reality. The data says that there are 10 million tons of soybeans without a price for the 2021/22 campaign. We believe that there are less than 6 million tons in that condition, and the estimates of 22 million tons are still high, it could be a little less. Let us remember that, before each announcement of estimates, the reported values fall.
Q.: It’s a big problem.
-Correct, we have the real numbers in our private report, but we have a big difference between the soybeans estimated by the Government, and our estimates collected in the territory.
Q.: Will the government be able to get US$5,000 million from soybeans?
-It is difficult for the Government to collect the US$5,000 million that was proposed, this should correspond to a sale of 10 million tons of soybeans from the week that ended next May 31. If it finally happens, it could be due to an advance of export funds, but we do not see the willingness of the producer to sell soybeans. Moreover, I believe that the Government does not know the idiosyncrasy of the producer. He will end up bagging the soybeans that he does not need to sell, and if he needs money he will sell the corn that he harvests in the coming months.
Q.: What would be more convenient?
-Personally, I would sell the soybeans and keep the corn, but what I think doesn’t matter here, reality depends on what the producer thinks. They feel cheated by the government: a year ago soybeans were worth $51,000 a ton, and today they don’t pay $100,000 with soybean dollars, so only those who need the money sell, the rest will keep soybeans and refinance debts.
Q.: What happens with the regional economies?
-To access the agricultural dollar, you first have to visit the secretary of commerce to set the price of the product in the domestic market. Nobody is interested in having their field marked, I think that regional economies hardly sell for agricultural dollars, and then they have to give away their merchandise to the domestic market. The government has less streets than Venice.
Q.: Should the Central Bank raise the interest rate?
-Of course, the fixed term in pesos is a lousy business, it pays you 6.5% per month versus inflation of 7.7% per month, at least the rate should rise shortly, otherwise this inaction by the Central Bank would speed up the portfolio dollarization process.
conclusions
- We give the death certificate to investment in pesos, inflation is higher than interest rates, the wholesale dollar is behind, and the implicit rate of the futures market is at 126% per year. The wholesale dollar as of March 2024 at $517 is cheap. Alternative bucks at $400 are a bargain price.
- It is time to borrow in pesos and buy dollarized financial assets with rates of return of more than 10% per year, as is the case of negotiable obligations and sovereign bonds (these will be slightly offered due to the sale of the State).
- We project inflation one year ahead at 160% per year, and the devaluation rate could be above said level one year ahead, with a new government through.
- It is time to buy things, owe pesos and dollarize wallets.
- Governance will be very difficult after August 13, the PASO elections will result in diverse political readings of the electoral result. We are going to see new reconfigurations of the political scene, where it will be defining how young people and women vote. Whoever reads from the perspective of a person over 45 years of age is wrong, you have to look at the electoral scenario from the perspective of centennials, millennials and women.
Source: Ambito
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