The experiment was made of rubber

The “Soy Dollar 3” It is not delivering the results the government expected. In the early days of the plan, which is to improve the exchange rate for soybean complex and other agricultural products by 50%, he barely made a billion dollars. This contrasts with what happened last October, when the then new Economy Minister Sergio Massa managed to raise 5,000 million dollars in the first days of the experiment to temporarily raise (for 30 days) the value of the dollar for the seeds of soy. What’s happening now?

The moments are totally different. In October, the producers they had nearly half of the soybean crop in their possession (about 20 million tons). In reality this is what happens every year: about 4 million tons are sold each month, accompanying the demand for export.

But the government’s urgencies led to stimulate advance sales and the resulting liquidation of foreign exchange by exporters. They don’t liquidate when they want to, but when they need to earn pesos to pay for the goods that the producers sell them.

Faced with the carrot of the temporary exchange rate improvement, farmers opened their silobags and sold half of what they had (10 million tons, which at $500 yielded that $5 billion figure).

Driven by the initial success, in December Massa tries a “remake”. He didn’t get the same result, but still and everything was done another 3 billion. And there the magic ended.

Actually, the soy is gone. There was only a little left, needed for seed for the next campaign, and something else for the bottom of the pot, to keep it going. It should be understood that the commodity is the savings bank in a complex and expensive financing business. The wheel had to keep turning, waiting for the new harvest, which starts in April.

And drought appeared. The soybean harvest (wheat had also failed and corn is severely affected) is at its lowest in 20 years: it does not reach 25 million tons. When the harvesters arrive, it is confirmed that the yields are still lower than estimated by agricultural organizations and the government.

So the background is the soy shortage, no less than the main currency generating product. Those who have some of this manna that flowed on the pampas are taking care of it more than ever. They walk away with a sizable loss as a campaign balance.

A crop of 25 million tons has a total value of 7,500/8,000 million dollars, and this is valid for the entire year. Replanting costs much more. Restoring the flow of production is a separate issue from the government’s plight. This is not said. More: they remain export duties remained intact, reaching 35% in the case of soybeans. One in three trucks that producers send to the port, with the load at their expense, is seized by customs, without anesthesia.

Economist Juan Carlos de Pablo says so “the price is when the goods appear”. This dollar price does not encourage supply of soybeans. Political noise also plays its part. Another economist, Lucas Llach, who was vice president of the central bank in the Macri government, assured on Twitter that It was cheaper for producers to finance themselves in dollars (breaking the piggy bank) than to deliver their soybeans. He believes that this exchange rate gap cannot be sustained and that the most likely scenario is that of a break-even between the official dollar and the blue.

But there are few who can bear the stop, in the face of the catastrophic agricultural campaign. There is an implicit struggle, without any recommendation or advice from agricultural boards or consultants.

Be that as it may, the concrete thing is that the soy dollars do not stretch and the experiment was made of rubber. The shortage was the beginning of the end of the Macri government. And it predicts a complicated end to Alberto Fernández’s mandate.