Posted on February, 16, 2022 at 09:09 am
In the last week, the international grain market in Chicago reported a value of 600 dollars for the ton for soybeans and almost 300 dollars for its equivalent in wheat, two levels that put these crops at historical prices. In that same period of time and even faced with the possibility of high foreign exchange earnings, Argentine producers – who sell to exporters and millers – reduced their shipments by 50 percent, which shakes the country’s foreign business and can alter domestic prices of products made from flour. As told to Page I12 agricultural producers that have been following the market, there are several reasons, such as the global crisis and the tensions in Ukraine, but above all they point to speculation that has as its axis pressure for a devaluation.
“Sales levels drop dramatically”described a man from the sector before this newspaper. The January numbers already showed a certain trend, which has intensified in recent weeks. Already last year there were some signs: in the case of soybeans, 8.1 million tons were sold in 2020/2021, and in 21/22 that number dropped to 6.7 million. And in the case of corn, the matter remained as follows: in 20/21 15.8 million tons, against 14.8 in the 21/22 campaign. That reflects how speculation began when the international price began to be on a very marked rise.
This retention pending a devaluation is a problem for the National Government and for the private sector itself. In the case of milling, they are managing with the stocks they have to sustain the provision of a basic input. “There is very little supply, we are looking for where to buy,” said an owner of a small mill in the interior of Buenos Aires. In the region of the province of Buenos Aires is where the greatest sales problems are concentrated, while in the interior the situation is more comfortable.
“The wheat they are dollars, the one that does not have immediate obligations, hoards wheat”, detailed another man from the sector. Today, in numbers, the volumes of output of wheat from the fields to the mills and export are a little below the year past, which had already been difficult. This type of speculation with grains is not new: the storage of crops in silobags is a characteristic of periods in which agriculture smells of exchange rate volatility. What is striking on this occasion, they point out in the sector , is that the business of selling now is more convenient than waiting, given that the National Government has already signaled that a devaluation of the peso is not in the offing, beyond the process of narrowing the gap between the official dollar, the parallel and financial dollars.
On the government side, there is a double concern in this context: the first, that the volume of foreign currency income from export settlements be altered in the remainder of February and March, which is when the Central Bank’s reserves need dollars the most. . The second point, that the lack of wheat does not begin to hit the domestic prices of some basic products, not only bread in bakeries. As this newspaper advanced last week, an income of more than 35 billion dollars is expected for this year from the harvest that is sold abroad. Of that total, between February and March, more than 5 billion would enter, which would be a key factor in stabilizing the official coffers.
That volume, last year, disappeared covering money that was used to pay interest on the debt with the IMF that the government of Mauricio Macri contracted. But even in this 2022 that had a drought at the beginning, the flow of foreign currency will be more useful once the agreement with the international organization is closed. “We hope that the sales flows are regulated”, yearn for those who live directly or indirectly from the produce of what the primary field harvests.
Source: Then 24