The Argentine government has extended the country’s fourth ‘soya dollar’ scheme until 25 October in a bid to boost foreign exchange reserves and contain the dollar rise ahead of this month’s presidential election, AgriCensus reported.
Argentina’s Economy Minister Sérgio Massa is running for office in the presidential election on 22 October.
“The negative net reserves picture is complicated; I believe that this is what explains the extension and that is what moves those foreign currency markets,” Guido D’Angelo, an economist at the Rosario Grain Exchange (BCR) told AgriCensus.
The government had indicated to soyabean crushers that it would not extend the programme, the 3 October report said.
However, the CCL (contado con liquidacion) dollar surged on Friday 29 September – the last working day of the scheme – reaching 820 pesos/dollar. By Monday 2 October the CLL dollar had reached a record 829 pesos/dollar.
The extension decree said importers could use only the CCL dollar to liquidate 25% of the proceeds of soyabean exports, as the government tried to limit its rise, AgriCensus wrote.
Prior to the extension, this percentage could be exchanged using the CCL or the Mercado eletrônico de pagos (MEP).
The remaining 75% continues to be exchanged at the official rate of 350 pesos/dollar, while operations can be made until 20 October, according to the report.
Market players were also surprised by the measure due to the low volume of soyabeans – around 3.9M tonnes – still available for trading, according to BCR data quoted in the report.
The decree also widened its application to other products under the Mercosur Common Nomenclature – used to identify products exported by countries that are part of the economic group – which meant other items, agricultural or otherwise, could be added, the report said.
Introduced to boost exports and foreign currency income, the fourth soya dollar scheme started on 5 September and had initially been due to end on 30 September.
During that period, producers traded 4.6M tonnes of soyabeans in the domestic market, according to BCR data, which was slightly above the target of 4.5M tonnes.
Soyabean export license applications (DJVEs) totalled 729,604 tonnes while soyabean oil and soyabean meal export applications reached 7,744 tonnes and 133,754 tonnes respectively, totalling 934,245 tonnes, according to BCR data.
According to BCR estimates, the dollar income from the fourth soya dollar scheme was US$1.7bn, which was below the government’s US$2.5bn target.
The scheme’s extension could add another US$1bn to government reserves, according to Argentine newspaper La Nación.
According to Argentina’s oil industry chamber Ciara-CEC, producers sold 28.3M tonnes – equivalent to an income of US$16.19bn – during the country’s first three soya dollar schemes.
