Argentina’s new ‘soy dollar’ plan to run from Saturday to end-May

Argentina’s third plan to increase its foreign currency reserves by boosting soybean exports, to be announced on Wednesday, will take effect on Saturday until May 24, a government source said.

The “soy dollar” plans, launched in the second half of 2022, aim to increase sales and exports of soybeans and its by-products by offering producers an exchange rate higher than the official rate of 210 pesos per dollar. The government is seeking to increase reserves to deal with a tough economic crisis.

“The agreement with the (agro-exporting) grain companies to establish a guaranteed minimum settlement (will run) from April 8 to May 24,” the source told Reuters late on Tuesday night.

The source, who requested anonymity, did not comment on the expected exchange rate.

In the second such plan Argentina launched at the end of 2022, the rate was 230 pesos to the dollar.

While the government has not published its estimate for the 2022/23 soybean season, the major Buenos Aires grain exchange projects 25 million tonnes, the lowest production in 23 years.

After the first two plans, only 17.5% of the 44 million tons of soybeans harvested in the 2021/22 cycle remained unsold at the end of March, official data showed.

See below Argentina’s soy (hs 1201) exports from Jan 2020 to Dec 2022, measured in TEUs according to DataLiner data.

Argentina’s soy exports | Jan 2020 – Dec 2022 | TEUs

Source: DataLiner (click here to request a demo)

So far 5.5 million tons of 2022/23 soybeans, whose harvest has just begun, have been sold, compared to 12 million tons at the same date in the prior season, the Secretariat of Agriculture said.

Foreign currency inflows, which the ruling Justicialist Party expects to total $15 billion during the second and third quarters of 2023, would ease Argentina’s battered economy but is unlikely to offset damage from a historic drought in the country.

Source: Reuters

To read the full original news report, please check: https://www.reuters.com/article/argentina-grains-soybeans/update-1-argentinas-new-soy-dollar-plan-to-run-from-saturday-to-end-may-source-idUSL1N3681P2

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