December 20, 2022

Argentina's special exchange rate for soybeans has resulted in more export sales

Argentina's "Export Increase Program" (PIE), a special exchange rate for soybeans, has resulted in US$1.824 billion worth of soybeans sold aboard, MercoPress reported.

The PIE, also known as "soybean dollar 2", recognises a parity of ARS 230 for each US dollar (ARS 100 = US$0.58), has generated positive results, in addition to a global supply shortage amid rising demand.

The price of the oilseed was quoted at ARS 80,000 per tonne on the first working day following the introduction of the new soybean dollar. Eventually, the price increased to ARS 100,000 per tonne.

On December 1, soybeans were selling for US$371 per tonne, which, with the dollar at ARS 230, translated to ARS 85,330 per tonne. A week later, the price increased to US$430, and the PIE's peso equivalent hit US$98,900. A US$59 per tonne improvement that is more than significant.

According to the Rosario Stock Exchange, the PIE, which establishes a different exchange rate for exporters of soybeans, has increased the sale of more than 3,885,000 tonnes of soybeans since November 28.

The goal of the special exchange rate is to increase the agro-export complex's foreign currency liquidation in order to boost international reserves and, for this reason, to reach at least US$3 billion by the end of the year.

On September 5, the scheme was initially put into action ("soybean dollar 1"), and it was successful in liquidating US$8.125 billion. Sources in the financial industry said the influx of foreign currency has allowed the Argentine Central Bank (BCRA) to purchase up to US$1,054 million this week and about US$361 million last week.

-      MercoPress