The Argentine government has confirmed that its re-introduction of the preferential exchange rate policy for agricultural exports – known as the “agri or soya dollar” – would include soyabean products and sunflowerseeds, AgriCensus reported on 10 April.
Argentina’s government published a decree on 10 April officially confirming the scheme – the third of its kind – and announced a preferential exchange of 300 pesos/US$ for soyabeans, soyabean meal, soyabean oil and biodiesel, the report on the same date said.
The decree includes over 50 products in the regional products list that are also able to be traded within the scheme, according to the report.
Although cereals were included in the list of regional products, wheat and corn were not, market participants were quoted as saying. Barley, sorghum and sunflowerseeds were also listed.
Argentina’s move follows last year’s introduction of two soyabean dollar schemes, when the government set a preferential exchange rate from US dollars to pesos for soyabean sales in a bid to encourage farmers to sell their crops and increase revenues for the state amid a shortage of US dollars, AgriCensus wrote.
The scheme would run until 31 May for soyabeans and by-products, and until 31 August for regional products, the report said.
Soyabean exports from the new scheme would generate US$5bn in revenue, the country’s agriculture secretary, Juan José Bahillo, was quoted as saying. Revenue from regional products was expected to reach US$4bn.
“The bulk of it will come from soyabeans,” Javier Preciado Patiño, former under-secretary of agricultural markets at Argentina’s Ministry of Agriculture (MAGyP) told AgriCensus.
Despite the range of products in the scheme, which some market participants claim is too wide, the secretary of agriculture has broad freedom to decide who can access the special dollar, according to the report.
The document also stated that only producers who had exported products in the past 18 months would be able to use the differential exchange rate, AgriCensus wrote.
“The selection will certainly be very rigorous, and the revenue can be reduced,” Patiño added.
“Giving the exporter a 300 pesos/US$ exchange rate means issuing money and this generates inflation, depreciating currency even more.”
The South American country is the world’s top exporter of soyabean meal and soyabean oil, and previous schemes have increased the central bank’s reserves of foreign currency, according to a Reuters report on 3 April.
The worst drought in more than six decades has taken a heavy toll on Argentine farmers, the report said.
While the government has not yet published its estimate for the 2022/23 soyabean season, the Buenos Aires grain exchange has projected soyabean production would reach 25M tonnes, which would be the lowest volume for 23 years, Reuters wrote.