August 2023

After a week of having entered into force the fourth edition of the differential dollar for the field, this time for the regional economies, corn and malting barley, the specialist in agricultural markets Marianela De Emilio ensures that a notable higher volume of liquidated corn is observed during the last week of July 23, in response to higher sales prices. “The result of Corn Dollar, one week following its entry into force, shows success for the proposed objective regarding the entry of foreign currency to the Central Bank of the Argentine Republic”, he estimated.

The Government seeks help in the agricultural dollar to avoid the reserve crisis

For his part, the Secretary of Agriculture, Livestock and Fisheries, Juan Jose Bahillorecently stated that the Government is “satisfied” with the results of the so-called “agro dollar”and estimated that the objective of entering foreign currency for US$ 2,000 million through the scheme will be fulfilled “more than”; At the same time, he considered the statements of some opposition presidential candidates regarding the withholdings “demagogic” and “opportunistic.”

“We are satisfied. She is within expectations. It was expected to reach a minimum of US$ 2,000 million in the course of the period until August 31, and it is already at 50% of that amountso it is within what we expected,” Bahillo said in dialogue with Futurock online radio.

How was the rate of liquidation coming and what changed

Regarding the rate of sales, De Emilio explains in an analysis that in the graph below, which belongs to the SIO granos platform, the corn sale operations carried out at the set price appear, that is, it does not include the volume of merchandise sold under the condition “to be fixed”.

During some days in April, daily sales that barely exceeded 200 thousand tons were observed., although it was in the middle of the early corn threshing stage. “Since the beginning of the corn harvest 22/23, until the week before the decree that established the Corn Dollar, between 20 and 200 thousand tons were sold daily, with sales of around 90 thousand tons being more frequent, sales of corn 21/22 and 22/23”, he explained.

However, regarding the prices obtained, De Emilio stated that “the prices in pesos at which it might be settled until July 20, (less than 300 thousand tons of corn 22/23) fluctuated between $53.700 y 43.600/TNaccording to the blackboard in Rosario, this range, in the official exchange rate, resulted in prices between U$S 254 y 179/TNwhich represents a variation of barely 20% in Pesos, while in Dollars it represents a variation of more than 40%, as a result of the devaluation suffered by the national currency in recent months,” explained the Agronomist Engineer.

And he added: “Given that the largest volume of sales was for export, and that FOB prices from April onwards fluctuated between U$S 280 y 230/TNit can be said that they entered the country approximately US$75 million for export of corn 22/23 as grain”.

At the same time, the agricultural markets analyst indicated that “as of last July 24, priced corn settlements, as registered in SIO grains, amounted to more than 2.3 million tons, at prices in PESOS that fluctuated in around $62.000/TNwhich, at the differential exchange rate, corn dollar $340/U$Sequals US$180-182/TN. Considering the FOB price since July 24, at US$220-225/TNit can be said that the settlements since the entry into force of the corn dollar represent a potential inflow of foreign currency of more than US$500 million25% of the objective of this corn dollar when the period ends at the end of August, of U$S 2,000 million”, Indian.

Agricultural dollar relation, inflation

On the other hand, De Emilio analyzed the impact of the agricultural dollar on the purchasing power of consumers. “It is known that the price of meat, mainly bovine, has advanced with a delay in the price to the producer and to the consumer, complicating the livestock profitability. The current rise in the price of corn, which went from $50.000 a 62.000/TN (24%), would impact the costs of the different meat, dairy and poultry chains, in various percentages, which are projected between 9 and 11%, and would be transferred to different degrees to the final consumer,” he warned.

The “PASO plan” will bring more pressure on the dollar and inflation

For the market specialist, “Given the inflationary delay of meat compared to the rest of the food in the basic basket food, a price update might be noticed that affects the purchasing power of the final consumer. However, the decrease in purchases will partially stop these increases,” he said, adding that, by the end of August, the consequences in terms of prices and sales volumes of meat, dairy products and eggs will be known, due to the differential exchange rate for corn. , basic input of these value chains.

Regarding the increases in meat that are being heard in the last hours, the Secretary of Agriculture Bahillo does not see it as a consequence of the agricultural dollar but of an “adaptation”because “from January and February until now there has been practically no price movement”, and recalled that the same situation occurred in 2022.

LR