The Argentine government extended the soy dollar scheme to all products until November 17, two days before the second round of the next presidential election, according to information from AgriCensus.
The country's Ministry of Economy announced on October 24 that importers could use the CCL dollar (contado con liquidación, also known as the financial dollar) to settle 30% of export profits, representing an increase of five percentage points compared to the rate previous 25%. The official rate, currently 365 pesos/US$, can be used to exchange the rest of the 70%.
“As the financial dollar rises, conditions improve for exporters,” commented analyst Javier Preciado Patiño to AgriCensus.
On the day of the report, the CCL dollar was at 980.62 pesos/US$.
Election results in Argentina and their impact on the soy dollar
The government's announcement came after Economy Minister Sergio Massa surprisingly emerged as the frontrunner in Sunday's presidential election, even though previous polls favored his main rival, Javier Milei, according to AgriCensus.
“This creates an expectation of continuity of the current economic policy, thus, many of the speculations about possible changes will dissipate”, added the analyst.
This change could influence producers' behavior in relation to sales, as mentioned in the report.
Last month, sales of soy were slow as producers withheld sales due to uncertainty regarding the direction of the country's economic policy, as AgriCensus reported.
The fourth edition of the soy dollar scheme began on September 5th and was initially supposed to end on September 30th. They later extended the deadline until October 25th. On October 11, the government incorporated sunflower, sunflower oil, sunflower seeds and barley into the program. This suggests the possibility of expansion to other items.
Based on estimates from sources in early September, Argentina had about 7 million tons of soybeans for sale. However, the volume is believed to have declined to approximately 3 to 4 million tonnes at the time of reporting.
Since the start of the fourth edition of the soybean dollar scheme on September 5, soybean sales have totaled 5.1 million tons.
“It is difficult to predict whether this will encourage more sales by farmers, as stock is limited. We will have to wait and see”, commented a source to AgriCensus.
Source: Oils & Fats International
