The announcements by Minister Sergio Massa on the improvement of the soy exchange rate and some products of the regional economies deserve careful analysis. Not everything is the same, even if the common denominator is the the improvisation and the appeal to the slaps of the drowned in a (remembering Osvaldo Soriano) sad, lonely and definitive.
First, the soy dollar 3 would last 30 days, like its counterparts 1 and 2. With those, the government has recouped the balances and surpluses of the past campaign. Taking advantage of a 30% exchange rate improvement, farmers anticipated the sale of 10 million tons, about $5,000 million, in September 2022. 1,500 in the first two or three days.
With that, Massa was able to go to Washington exercising some maneuverability. He reassured the IMF and managed to convince the IDB and CAF to advance another handful of dollars to “strengthen reserves”.
In October, now without the effect of the improvement in the dollar, sales decreased and also those of exporters. Then, at the end of December, the “2 soy dollar” was implemented, with which the mop went for the 5 million left in the silobolsas. 2,500 million entered.
The question now was to get to the 2023 harvest, which is just starting. Only the drought got in the way, and the volume to be harvested will be half of what was expected. In value, about 15 billion dollars. God is no longer a Peronist. Or the devil has blocked his tail.
In addition, half of the grain was also lost (10 million tons, shipments that would have allowed the entry of 3,500 million dollars). And about 20 million tons of corn are also going down the drain, another $5,000 million. Total, the loss compared to what was expected is 23 billion dollars. exactly half of what exporters liquidated last year.
In this context, the soybean 3 dollar (which would be around 300 pesos per dollar and would apply only in April) is simply a mechanism to frontload sales of a lean crop. It is what it is. Producers will certainly benefit from the bolada, as in September and December. But there will be no summer because the market knows it’s all here. The total value of the soybean crop, 100% exported, is $12 billion. Corn is the other source of foreign exchange, contributing another 6 billion. The grain no longer remains.
Non-secondary fact. Massa simply improved the value of the dollar, but he didn’t even talk about touching withholds. In other words, it will continue to capture the value of one in three trucks that farmers send to the port, freight paid. Plus transport VAT. In the midst of the debacle and income crisis looming over the industry, this is nonsense that jeopardizes working capital and future plantation. Another delayed action bomb, from which the next government and all of society will have to take. The governors of the provinces of the Central Region (Entre Ríos, Santa Fe and Córdoba) they asked this week the end of export duties. Farmers have done what they could so far but everything has a limit and the limit has run with the historic drought.
The other chapter is that of regional products. his eyes, the impact of a substantial improvement in the exchange rate cannot be ignored, can mean a breath of fresh air for the sectors concerned. Rice and peanuts need the dollar to adjust to the pace of costs, in a context of low international prices. These sectors, especially the rice sector, are also feeling the effects of the drought. Massa’s announcements have not established a term of validity, but everything indicates that they are here to stay.
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.