Soybean exporters sell record-high US$1 billion in one day

Soybean exporters liquidated more than US$1 billion on the last day of May, the third-to-last day of the “agro dollar III,” a US$1-AR$300 preferential exchange rate launched last month. The aim was to boost agricultural exports and strengthen international reserve accumulation in the midst of a historic drought.

With the US$1.05 billion liquidated today, the measure has brought in a total of US$5.08 billion since the government kickstarted it.

The “agro dollar III” means that, for a limited time, agricultural producers can export soybeans, other soy products, and regional agricultural produce —such as yerba mate, wine, rice, tea, and wood— at the beneficial exchange rate of AR$300 to the dollar while official exchange rate is currently at AR$239.33.

The chart below shows Argentina’s exports of soy oil shipped in containers between Jan 2019 and Mar 2023, according to the DataLiner maritime data service by Datamar.

Soy oil exports from Argentina | Jan 2019 – Mar 2023 | TEU

Source: DataLiner (click here to request a demo)

The liquidation deadline for soybean exporters was originally set for today, but it was extended until Friday to compensate for last week’s bank holidays on May 25 and 26. For regional economies, the liquidation deadline is August 31.

The whole amount was bought for AR$300 a dollar by the Central Bank, which then resold US$601 million at AR$293.33 a dollar. Still, the monetary authority managed a US$ 451 million net positive balance, the highest since December 29.

When the government launched the measure, the goal was an inflow of US$ 5 billion from soybean exports.

“Was the target met? Strictly speaking, no,” Santiago Manoukian, the research lead of the Ecolatina consulting firm, told the Herald.

“The initial US$5 billion target only referred to the soybean industry liquidations. So, we can assume, based on statements by government officials, that the target amount was between US$7 and US$9 billion when also contemplating liquidations by regional economies.”

Source: Buenos Aires Herald

To read the original source, visit: https://buenosairesherald.com/economics/soybean-exporters-sell-record-high-us1-billion-in-one-day

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