Despite the help of the weather, the Argentine Agroindustrial Council foresees a challenging year for the Argentine countryside. Forecasts speak of prices even lower than those of 2024, while costs continue to escalate. Regarding the exchange scheme, Gustavo Idígoras told Ámbito that the dollar is expected to follow the blend and the appreciation of the peso. Exports in quantities would grow but the income of foreign currency could decline. Margins are shrinking for the producer and they warn of “risks of bankruptcy.”
Unlike what happened in 2023 when the climate situation caused the Argentine countryside to lose about US$20,000 million.in 2025 the weather could be good. In principle, the forecasts that spoke of a Niña or mild Niña phenomenon seem to be left behind. Temperatures were lower than expected and rains appeared in November.
With this scenario, The Argentine Agroindustrial Council (CAA) anticipated that higher production and export levels are expected during the 2024/2025 cycle. In the first case, they forecast a total of 131.7 million tons, which represents an increase of 4% and in the second case an increase of 7% until reaching 93.5 million tons.
As for prices, the story is different. According to CAA data, during 2024 there was a general decline compared to the previous year, with falls of up to 31% in some products. For 2025, a scenario “of even lower prices if futures are taken as a reference” is anticipated.
The director of RIA ConsultoresJavier Preciado Patiño, land told Ámbito that “South America is going to set the tone for Brazil’s great harvest. “If the Argentine campaign prospers, there will be an oversupply of soybeans.” and warned that this increase “is not going to be absorbed by demand, so the Argentine producer is faced with a price that is not good and that can go down a little more, although it would be close to hitting a floor.”
The impact of the drop in prices will be strong, to the point that despite having greater production and growing export volumes, The Argentine Agroindustrial Council estimates that foreign exchange income will fall by about US$710 million compared to 2024.
Blend dollar and super peso
The Government’s message to the sector was clear: the appreciation of the peso is here to stay. With those rules of the game. The field seeks to rearrange its equation for the coming campaign. “They told us repeatedly that in 2025 the exchange rate strategy will continue. “We will have to find a way to maintain competitiveness,” Idigoras acknowledged.
In this regard, the president of the Chamber of the Argentine Oil Industry told this medium that from the dialogue with the Government comes the certainty that “For now, the blend dollar is a mechanism that will continue” although he maintained that “at some point in 2025 it may have some end.”
Due to the compression of the gap, the official exchange rate today does not differ too much from the blend. But in times of greater volatility it helped the Central Bank to pour supply into the parallels and guarantee exporters a price closer to the market.
Increase in costs and reduction in withholdings?
The equation for some producers begins to get complicated and this time the exchange rate does not appear as a solution. The Minister of Economy, Luis Caputo, anticipated days ago that if inflation continues to slow down, he will lower the monthly devaluation rate to 1% in the first quarter of 2025.
According to Preciado Patiño, the combination of rising costs in pesos, the application of the “exchange table” and withholdings pushed producers’ margins to the limit: “they are going to have to adjust somewhere.” He said and warned: “either it is adjusted for costs such as leases and supplies, or the chances of there being a bankruptcy due to some climate problem are very high.”
The other variable is withholdings. Javier Milei promised a reduction in the rate during his campaign. The President visited Rural a few days ago and said that if there is fiscal room in 2025, he will proceed. But there arises another challenge: despite the fact that collection has been growing, the COUNTRY Tax ended and it will be a hole to cover next year.
Source: Ambito
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