5 September 2022

2 minute read

South America

Argentina's Economy Minister Sergio Massa announced new incentives beginning on Monday for soybean farmers to sell more of their stock by accessing a better exchange rate, in a bid to boost exports and hard currency reserves, reported Reuters. 

The Sunday announcement covers incentives that are set to last through September 30.

An agricultural powerhouse, Argentina is the world's biggest soy oil and meal exporter, as well as the No. 3 soybeans supplier.

Amid a deep economic slump marked by soaring inflation, President Alberto Fernandez's government is seeking to boost US dollar reserves to meet the terms of a $44 billion debt deal with the International Monetary Fund.

Massa, who Fernandez tapped to be economic chief last month, told reporters at a news conference that soybean farmers and exporters will for the remainder of September be able to sell and ship a tonne of the grain using an exchange rate of 200 pesos per US dollar. That is well above the tightly controlled official rate of around 139 per greenback they previously had to use.

"Our farmers should feel that the government is with them, understands their problems, but that it also needs them to continue consolidating the recovery and stability of Argentina's economy," said Massa.

The minister said the incentives will lead to sales of $1 billion over the next three days.

Industry leaders were critical in their initial reaction to the sales sweeteners.

Nicolas Pino, head of the SRA rural association, described the measures as "transitory" since they will only last for one month, while Carlos Achetoni of the FAA agrarian federation argued that only big farmers would benefit.

Through the end of August, Argentina's farmers sold nearly 52% of the 44-million-tonne soy harvest during the 2021/2022 season, according to official data, significantly below sales notched during the same period in the previous season.

Source: Reuters