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Drought and exchange rate distortions promoted by the government.
After problems with the prolonged drought, Argentine soybean producers have now stopped selling the 2022/23 harvest – which was already long overdue. According to the specialized portal Valor Soja, agro-industrial companies “rejected the new exchange rate from the BCRA (Central Bank of the Argentine Republic) as they considered it 'harmful to the entire chain'”.
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According to the article, the drought and distortions promoted by the federal government through the exchange rate regime called “soy dollar” are causing a significant delay in the commercialization of soybeans for the 2022/23 harvest. Until January 18th, according to official data updated this Tuesday by the Ministry of Agriculture, 2022/23 soybean sales totaled just 3.01 million tons.
“This figure, considering a probable Argentine harvest of 37.0 million tons – preliminary estimate from the Rosario Commerce Exchange – would represent a proportion of around 8.0% against 13.8%, 14.3% and 26.9% in the same dates back to two and three years ago”, adds Valor Soja.
According to them, of these 3.01 million tons of 2022/23 soybeans sold so far, the majority (2.21 million) are “to be fixed” operations and, therefore, have no confirmed price: “For the next season , shipments of Argentine soybean meal 2022/23 barely registered 2.92 million tons, of which 1.58 million will be exported in April and another million in May”.
“This 'commercial drought' is one of the main factors that has been supporting international prices for soybean meal, since Argentina, under normal conditions, is a major exporter of the product, which has been originating mainly in recent months in Brazil and the USA ”, concludes Valor Soja.
Source: Leonardo Gottems | agrolink
