Argentina plans new exchange rate for wine producers

Argentina’s government is drawing up plans to introduce the so-called ‘Dolár Malbec’ – yet another specialist exchange rate, this time aimed at its struggling wine producers.

In a speech in Mendoza on Saturday, Economy Minister Sergio Massa announced that a new parallel exchange rate for the wine industry would be introduced on April 1. It was quickly dubbed the ‘Dolár Malbec’ (after Argentina’s signature grape) or the ‘Dolár Vino.’

Massa did not reveal its value per greenback, but indicated it would function like the other parallel exchange rates introduced by the government for sectors of Argentina’s economy, such as the recent ‘soy dollar’ rate for agricultural producers and the ‘tech dollar’ rate for knowledge economy professionals.

Restrictions on the purchase of foreign currency in Argentina date back almost 100 years and have been imposed intermittently. The most recent system, established by President Alberto Fernández’s government in 2019, currently has an official rate that currently stands at 196 pesos per greenback.

But this still isn’t enough to contain the demand for dollars and, in the face of Central Bank shortages, the government has introduced a dozen exchange rates on the legal market aimed at sectors of the economy or specific transactions that require foreign currency.

Wine-makers in Argentina are expecting a dramatically reduced harvest this year, with the latest official estimates forecasting production could drop by at least 20 percent.

Massa said Saturday that this latest measure is designed to “recover competitiveness” for “all producers” and ensure that the price of wine does not soar domestically.

Weather conditions have seriously affected the industry in recent years, with large declines in grape production between 2021 and 2022, with the decline set to continue this year.

Massa, who said that climate change is “punishing” vinters, said Argentina “should be aware of the difficulties facing the sector” and that the industry behind one of its signature exports is struggling.

“The climate is punishing us more and more frequently, it has been taking away spaces to produce, there are almost 10,000 vineyards less in the whole country,” said Massa, who said a 10-billion-peso credit-line would be available to producers who have lost harvests due to bad weather.

“This year we expect volume of less than 21 percent compared to last season, which was already scarce. We are also 34 percent below the levels of the last 10 years,” he observed.

Source: Buenos Aires Times

To read the original news piece, please visit: https://batimes.com.ar/news/economy/dolar-malbec-argentina-plans-new-exchange-rate-for-wine-producers.phtml

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