The second edition of the soybean dollar in Argentina It is a glass with water up to half. Half full is that, in just three days, the export liquidated 1 million tons of the 5 million that must be sold until December 30 to guarantee the floor of US$ 3,000 million.
The empty half is that That million tons represents 40% of the sales of the first three days of what was the first soybean dollar.. According to private estimates, the exchange rate at 230 Argentine pesos would bring between US$3,500 and US$4,000 million this time, against more than US$8,000 million in the first round.
There are different arguments for the Argentine government to be optimistic about the success of this measure. An official source mentioned those that will condition future currency income: for the drought that already reduces the wheat harvest and will condition the soybean planting, corn and other crops In the next season, producers must earn pesos to pay expenses and debts, given the lower prospects for future income. Another official source even ventured that they could reach up to US$ 5,000 million with the new export window at a differential price.
different projections
Analysts are more prudent. Nicolás Sesnich, a specialist from the consultancy FyO, maintained that the government “is going to have to row” to get the US$ 3,000 million that the cereal companies guaranteed. “This soybean (in silo bags) thought it would not be sold. The one who needed pesos took advantage of the first soybean dollar to do everything he had to do. It is true that the smaller wheat harvest can speed up sales, but the needs for corn will only be in April and perhaps people prefer to wait to keep the pesos,” he said.
According to the consulting firm Equilibra, this new soybean dollar could add up to US$3.8 billion, to raise the prospects for the entire agro-export complex to US$4.6 billion. “Without the measure, we estimated a foreign exchange inflow from the entire oilseed cereal complex of US$ 1.9 billion in December”he asserted.
Analytica estimated that, based on the first three days, sales would reach 85% of the crop and could touch US$3.5 billion until the end of December.
The MAP consultancy projected that agriculture would liquidate between US$3,000 and US$4,000 million in total, but mainly thanks to soybeans and their derivatives. “Assuming that, after the interventions in the exchange market, the Central Bank netly purchases 60% of what was liquidated, as happened in the September scheme, it could acquire between US$1,800 and US$2,400 million to add to its stock of reserves”, affirmed Juan Pablo Ronderos, partner of MAP.
Operations started at a very good pace in the first two days and they were tempered on Wednesday, after the Minister of Economy, Sergio Massa, affirmed that he called a cereal company to “break the market” and offer more money to producers.
Beyond the controversy the cereal companies did not transfer to the producers the full price of the exchange rate improvement. Antonio Aracre, CEO of Syngenta, clarified in radio reports that he paid 88,000 Argentine pesos per ton as a result of the company’s strategy and not because of a request from the minister. His competitors paid 80,000 Argentine pesos until last Wednesday, or 14% more than on Friday. In between, the special dollar rose more than 35%.
A source in the sector assured that producers expect a better price for their soybeans and that if the grain companies improve the conditions, the liquidation could reach US$ 4,500 or US$ 5,000 million. The bidding would be between the exporters and the producers, who have a month ahead to wait for better values for their harvest.
fiscal impact
The greater the liquidation of soybeans and derivatives, the greater the additional collection that will enter from export rights and, therefore, less adjustment needs to meet the 2022 fiscal goal of 2.5% of GDP.
According to the consultants, the extra income from withholdings will be around between 0.1% and 0.2% of GDP, although its effect could “split” in two, between December and January. “Ending the year with a primary deficit of 2.5% of GDP would require spending to fall 14.1% year-on-year in real terms,” said Lorena Giorgio, chief economist at Equilibra. “Taking the base scenario of US$ 3,000 million of additional liquidation, which would allow additional income of 115,000 million Argentine pesos (0.1% of GDP) to be recorded, the adjustment of the necessary expenditure to meet the goal would be reduced to 11.6 %,” he added.
Analytica and MAP calculated tax revenues of 200 billion Argentine pesos, or 0.2% of GDP. But Ronderos warned that it is an advance of foreign currency, on account of the estimated US$6,000 or US$7,000 million until March. Therefore, its effect on collection would also be anticipated.
The Chronicler / RIPE
