Soybean dollar: the Government’s objective behind the new farm incentive scheme

Almost ten days after its announcement, the Government launched a new version of the soybean dollar that encourages exports of the oilseed to bring foreign currency into the economy. In that sense, sources from the Ministry of Agriculture indicated to TN that they hope to raise around US$2000 million with the mechanism.

The Export Increase Program was made official through decree 443, published this Tuesday in the Official Gazette. Unlike previous editions, instead of creating a new higher exchange rate, agro-exporters were given the possibility of freely disposing of 25% of the foreign currency, while the remaining 75% must be settled at the official exchange rate. .

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The intention is that companies in the agro-industrial complex can buy more soybeans to process, since the drought reduced the harvest by less than half (20 million tons, less than the 43 million tons of the previous year and far from the record of 60 million tons achieved in the 2014/2015 campaign).

Thus, agro-exporters would improve the purchase price of Argentine soybeans by approximately 25%, which would bring the value per ton to close to $150,000. The Government believes that in this way greater commercialization of soybeans could be encouraged, at least part of the 7 million tons that remain in storage for this campaign and another 4 million tons that were marketed but have an unfixed price. , according to calculations from the Rosario Stock Exchange.

The Government made the new soy dollar official this Tuesday through a decree published in the Official Gazette. (Photo: Adobe Stock)

The initiative implies an exchange rate of around $450 for the combination of that 25% at a dollar of $770 and the remaining 75% at the official exchange rate of $350. This is what exporters of soybeans and derived products, such as biodiesel, will obtain for pre- and post-financing of exports or advances on settlements of sales operations abroad.

“Seventy-five percent of the equivalent value of the export of the merchandise (…) must be entered into the country in foreign currency and negotiated through the Free Exchange Market (MLC), while the remaining 25% will be freely available. “, details the decree.

That is to say, exporters can settle through Cash With Settlement (CCL) and – as indicated by specialists to TN – that 25% of dollars will not enter directly into the Central Bank, although it will allow more supply to be generated in the CCL and unpack the parallels.

The resolution maintains that “the National State establishes exchange and external trade policies aimed at increasing exports, always respecting the public interest, to ensure the supply of the internal market and strengthen reserves.” However, specialists warn that the mechanism would not have a great impact on the coffers of the Central Bank, as was intended in previous editions.

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“The reserve accumulation goal seems unachievable even with this, especially if they are going to continue intervening in parallel. Rather, it has to do with that: getting dollars by doubling to have the capacity to intervene,” Gabriel Caamaño, Ledesma economist, explained to this medium. In other words, it would be a measure designed to generate some exchange rate stability.

In that sense, the International Monetary Fund (IMF) recognized in its latest report that the Government used US$1.7 billion to intervene in the parallel market and contain the rise of dollars.

“Delays in macroeconomic policy adjustments led to increased reliance on various forms of intervention and administrative exchange controls. “In response to disorderly pressures in April and early August, the Central Bank intervened heavily in parallel currency markets and issued regulations to limit commercial activity,” the multilateral credit organization said.

Sergio Massa met with the IMF. (Photo: NA)

And he specified: “During this period, the BCRA has lost around US$1.7 billion in reserves, which adds to the challenges of reserve accumulation.”

Furthermore, the Government maintains an understanding with the IMF, in which one of its main goals has to do with the accumulation of reserves, an objective that the country failed to meet throughout the year.