The government has officially put in place this Monday the new dollar soybeans, with which it intends to strengthen the Central Bank’s reserves and achieve the objectives agreed with the Monetary Fund. In this new version of the program applied in September, the dollar it will cost $230 and a settlement of US$3,000 million will be requested.
On this occasion, the program that seeks to encourage producers to liquidate the harvest they withheld will be extended Until December 31st.
This was established with the publication in the Official Gazette of Decree 787/2022, signed by Alberto Fernández, and by the entire Cabinet of Ministers.
In article 1 of the regulation, the restoration of art “extraordinarily and temporarily”, of the “Program to increase exports, established by decree 4 September 2022, n. 576”. At that time, the soybean dollar was trading at $200.
“It is deemed appropriate to reinstate the Program with an exceptional and transitory equivalent value for foreign currency settlement which, on this occasion, and in line with the evolution of the applicable exchange rate introduced by the aforementioned Program, is finalized at $230 per US dollar” , was specified in the introduction to the Decree.
The new price updates the dollar value of the soybean based on the jump that the wholesale dollar has given in this periodwhich rose from $150 to $165. Thus, at this level, producers receive a 39% higher dollar than the rest of the exporters receive.
“It is necessary to continue the implementation of policies that tend to strengthen the reserves of the Central Bank of the Argentine Republic, stimulating the generation of genuine income of the National State, product of the export of goods with low incidence in the value of the national supply chains.” , argued the Government.
At the end of last week, the Economy Minister, Sergio Massa, anticipated that with this new soybean dollar they will try to “break the export record in what is the agro-industrial complex, it being understood that Argentina is part of the agenda of the food security agenda”.
From The Agricultural Federation reiterated its disagreement, just like months ago. In the organization led by Carlos Achetoni they interpret it as “a patch, which implies advantages for the few and complicates the majority”.
The Liaison Table entities warn that “since it is a measure for one month, it generates misalignments that do not help, further complicate and hinder commercial dynamics”.
They agree that the previous soybean dollar “had a very strong and negative impact on inputs to regional economies as well as poultry, cattle and pigs, and dairy farming.”
With the focus on reserves
The first version of the soy dollar was released last September at $200. This gave soybeans an incentive to sell out, since the official dollar was trading at $150 at the time.
This mechanism made it possible to settle 7.6 billion US dollars, of which the Central Bank has accumulated 5,000 million US dollars.
However, between October and November, the Central Bank lost $1.85 billion helping the market as deals fell sharply without the soy dollar incentive. Despite the fact that stocks at importers have been adjusted during this period, this amount Unable to add currencies.
This dynamic puts at risk the achievement of the objectives assumed with the Monetary Fund, which envisage closing the year with net reserves in excess of US$ 5,600 million. So far, these reserves total about $4 billion.
For this reason, and despite the fact that the September soybean dollar was supposed to be the only time, the government reopened this mechanism to capture part of the soybeans stored in the silobolsas waiting for a better price than the official dollar.
According to a report from the Rosario Stock Exchange, 8.6 million tons remain to be traded. At a price of $596 per ton of bean FOB, producers have about $5.1 billion.
Charles Arterburn is a seasoned business journalist for News Rebeat, where he provides comprehensive coverage of the latest trends and developments in the world of finance and economics.