April 11, 2023

 

Argentina's soy dollar scheme sees only few takers

 

Traders and analysts said Argentina's latest government incentive to increase the country's processed soybean exports attracted few takers on the first day of the scheme, which offers farmers and shippers a preferential exchange rate, Yahoo! News reported.

 

For all sales of soybean derivatives, the Argentinian government programme provides access to an exchange rate of 300 Argentine pesos per US dollar, which is 40% higher than the tightly controlled official rate of 213 pesos per US dollar.

 

Would-be participants in the "soy dollar" programme said they required more information.

 

The Argentinian government hopes to encourage exports of the key commodity in order to attract more hard currency to dwindling foreign reserves, which are especially needed to pay debt.

 

According to traders, spot market transactions under the most recent version of the policy, which was implemented last year, showed no movement on Monday.

 

Argentina is the world's leading exporter of processed soy oil and flour.

 

Ariel Tejera, head of market analysis at brokerage Grassi, said the market is still waiting for regulatory details. Tejera confirmed some futures transactions under the policy, albeit in small quantities.

 

He also expressed concern about what documentation is required, among other things.

 

Official data at the end of March showed that only about 17.5% of the 44 million-tonne 2021/22 soybean crop is still in local storage.

 

Meanwhile, official data showed that approximately 5.5 million tonnes of soybeans from the current 2022/23 harvest have been sold, compared to approximately 12 million tonnes at the same time last year.

 

-      Yahoo! News