In the first quarter of the year, dollar settlement of grain companies decreased by 65%

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Cereal companies liquidated in March $1,228 million for grain exports. The figure is a 59% less than the $2,984 million they settled in March 2022, and fully reflect the impact of drought. In the first quarter of the year, the export complex grouped in CIARA-CEC was liquidated $2.8 billion, down 65% from $7.925 billion in last year’s first quarter.

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Not for granted, the collapse in grain company liquidations is no less impressive. The Rosario Stock Exchange has warned that the losses of this campaign will reach no less than 20,000 million dollars and a third of that figure will stop entering the public coffers, through withholdings on exports.

Telling figures are what accelerated the negotiations to start the so-called “grodollar”, Advance by Economy Minister Sergio Massa this week in Washington – after meeting with the IMF authorities – and which could finish taking shape this weekend, to become official on Monday.

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What is known so far is that the new exchange rate – higher than the official one – will reach all export agricultural products and also livestock and regional economies. It is a devaluation focused on the main currency generator.

What’s not clear is how long it will be in effect or at what price those dollars will be paid.

A reference. The 2 soy dollar was pegged at $240, which was $40 above the 1 soy dollar. the beginning of the “soy dollar 2”. If the same rule were followed, the field dollar or 3 soybean dollar should have, minimum, priced at $27620% above soybean 2 dollar (effective through Dec. 31), which is accumulated inflation in Q1 2023 if, as expected, March inflation is around 7%.

The new dollar is therefore seen as the government as a new concession to exporters So as not to retrace the goods waiting for a major write-down.

Nor is it that the accumulated commodity is so large that it can now be put on the market to be converted into dollars.

The consultant Fernando Marull published it in a report released in the last few hours: “According to data from Broker ZENI, today there would be around 6 million tons of Soybeans left in 2022 (many doubts about this figure) plus a successful 2023 harvest of 25 million tons (Bolsa Cereals yesterday, but surely it will be less), they would offer 30 million tons (optimically), which at an export price of $600, is almost $19 billion. If the maker decides to sell 25% in April, it would be close to $5 billion. That will depend on whether a $300 dollar convinces the producer, meaning the soybean price in pesos to the MEP dollar today will be nearly U$S300, a “relatively high” level (and above the soy dollar 1 and 2, of US$ S250)”.

It remains to be seen, with the official numbers on the table, how much producers are willing to sell. Don’t forget that you have to pay off the debts from the previous campaign and prepare for the new campaign.

Source: Clarin

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