In just three months, for the concentration of dollar-soybean sales and pre-financing of importsprivate external debt increased 7,128 million US dollars, bringing the total to a record sum of 91,364 million US dollars, according to Central Bank data for the last July-September period. For the same period in 2021, the increase was US$12,517 million.
Of the US$ 91,364 million, US$ 52,266 million correspond to trade payables e US$39,098 million of financial debt.
As of 31 December 2001, the first date covered by the official survey, the external debt of the private sector stood at 77,593 million dollars. At the end of 2015 it amounted to US$ 68,416 million. Four years later, as of December 31, 2019, it had risen to $83.187 million. Then it was reduced to $76,770 million at the end of 2021 to grow in 9 months of 2022 to $14,594 million.
The entire increase in private external debt in July/September 2022 is “explained by the increase in commercial debt as financial debt experienced net write-offs in the third quarter. And “that about a 47% of the total stock of external financing was granted by companies of the same group”, states the report.
Of the increase in private debt, it should be noted that no less than 4,797 million dollars correspond to exporters – an increase of 82% compared to the end of June 2022 – and 2,295 million dollars to importers.
On the export side, the BCRA Report states that the increase “is explained by the impact of the “Export Increase Programme” through which, with Decree 576/22, a exchange rate of $200 for every dollar for Settlements in the Foreign Exchange Market for Exports of Soybeans and Its Derivatives, effective until September 30, 2022”.
The Report adds “that as of 30 September 2022, approximately 52% of the total export financing of goods was granted through commercial advancesto the detriment of pre-financing granted by foreign financial entities, up by 13 points compared to the participation as at 30 September 2021″.
That is a much of the liquidation of soy dollars is matched by a rise in private debt of the soybean sector, through the mechanism of credits and self-loans that could be canceled with the foreign sales of soybeans accumulated by the cereal companies. What was there was a concentration in the quarter of soybean liquidations and other grains at the special exchange rate received during the month of September.
There will certainly be a further increase in private debt in December due to the implementation of s{olar-soy at $230.
Therefore, the increase in the third quarter of 2022 was mainly explained by the “Food manufacturing” sector, which accounted for 66% of the total private external debt for goods exports.
This category “includes companies dedicated to the marketing of oilseeds and cereals, with an increase of 3,853 million dollars compared to the previous quarter”. According to the BCRA, the sector’s export debt is concentrated in a few companies: the top 10 accounted for 82% of the growth in debt for goods exports in the third quarter.
On the import side, debt increased by $2,295 in the third quarter and $8,888 million in 12 months. The BCRA report states that the “record debt for goods imports could be explained by the effect of adjustments to foreign regulations and changes in terms of import payments”, i.e. the financing of foreign purchases with foreign loans due to import restrictions due to a lack of dollars in BCRA reserves.
Like the exporters, related companies were the ones who provided the majority of financing for this type of deal.
Another worrying fact is the maturity profile because including both due and debt granted without an agreed maturity date, companies should in the near term meet principal maturities of trade payables for US$ 49,808 million, while the main maturities of financial debts reached USD 17,183 million. Certainly those debts will be refinanced but, in the meantime, interest payments are added.
Source: Clarin
