The government tries to polish the soy dollar but in agriculture they say there are distortions

The application of a special exchange rate of 200 pesos per dollar for the purchase of soybeans by exporting companies generated an avalanche of sales on the local market – more than two million tons in two days – but also produced a series of distortions that the government is now trying to resolve.

With a new resolution (5/2022) published in the Official Bulletin, the Ministry of Agriculture explained that the primary and secondary regulations of cereals – including the operations of futures contracts, early settlements and weighing of dollar contracts – are covered by the increase in exports program, but indicated that the special exchange rate does not apply to trade in cereals for inputs agreed before the entry into force of the decree, nor for the payment of the rents of the fields or for the purchase of by-products for the consumption of animals.

This distinction has generated controversy within the sector because it is a very difficult segregation to implement and control in practice, as producers of concentrates and products for animal consumption they have to buy soy in the same market where exporters buy it.

Monday morning, with the provision just inaugurated, Clarione He spoke to dairy farmers and pig farmers who reported increases already made by feed supply suppliers.

Marcos Peluffo, a dairy farmer in the area of ​​9 de Julio, province of Buenos Aires, explained that soybean husk pellets, a fundamental resource in the diet of cows, it had already gone from $ 190 to $ 270 per ton. “This measure automatically increases costs as balanced feed plants are driving costs to the new soy value,” she explained.

For the Buenos Aires producer, a measure that would partially overcome the impact of this resolution would be that dairy exporters also have the option of exporting with a dollar of 200 pesos. “We hope that at the end of the provision, which has a duration of 30 days, the costs are carried over to the previous values“He said.

For his part, José Dodds, executive director of the Argentine Pig Federation, warned that uncertainty reigns today because many animal feed suppliers do not give prices directly. “Because they will sell for a dollar of 140 if they can be flipped and sold for a dollar of 200? “he asks. Then he gives some interesting calculations on his business, which comes from a difficult semester in terms of profitability.” Feed is 72 percent of the cost of producing pigs. In this percentage, soy participates for 30 percent, but with the new price it would represent 36 percent of the cost of food. In this way the total cost per kilo goes from 207 to 227 pesos. Throughout the production line the cost of capon in food was 4,900 pesos and now rises to 6,600 pesos“, details.

Cordovan producer Néstor Roulet has been energetic about changing the soybean dollar decree and assured through Twitter that it doesn’t work. “Who will sell soy for domestic consumption if exports pay you 40 percent more? Either they shut down the extrusion plant, leaving chickens, pigs and cows without food, or they pay more and pass it on at the consumer price,” he said. explained. .

The rental issue is a special case. The producer in the Chacabuco area, Manuel Becú, comments that in mid-September he will have to pay a lease in tons of soybeans, fixing the price with the blackboard from the previous week. “Until yesterday we thought it would go with the dollar at 200, but a resolution has come out that says otherwise,” he says, and confesses some relief. In any case, he clarifies that it will be “an unpleasant interview with the owner of the camp”, because in the contract he indicates that the reference is the price of the blackboard, and the price of the slate is now governed by the soy dollar. “Finally, the soy we produce in the leased fields will not be sold for 70,000 pesos per ton,” he says.

According to the provisions of the annex to Resolution 5/2022, the expectation is that there are two different list prices, one for the subjects adhering to the Export Increase Program and the other for the others. There are still doubts in the industry as to how this distinction will be implemented.