Argentina offers incentive to boost soybean exports

Argentine Economy Minister Sergio Massa announced new incentives starting on Monday (5th) for soy producers to increase sales from their stocks, accessing a better exchange rate, in an attempt to increase exports and hard currency reserves.

The announcement, made on Sunday, covers incentives that are expected to last until September 30.

An agricultural powerhouse, Argentina is the world’s largest exporter of soybean oil and meal, as well as the third largest supplier of soybeans.

Amid a deep economic crisis marked by rising inflation, President Alberto Fernández’s administration is trying to increase US dollar reserves to meet the terms of a $44 billion debt deal with the International Monetary Fund.

Massa, whom Fernandez chose to be chief economics last month, told reporters at a news conference that soybean producers and exporters will be able until the end of September to sell and export a ton of the bean using an exchange rate of 200 pesos per American dollar.

That’s well above the tightly controlled official rate of about 139 pesos to the dollar they were previously supposed to use.

“Our farmers must feel that the government is with them, understands their problems, but that it also needs them to continue consolidating the recovery and stability of the Argentine economy,” said Massa.

The minister said that the incentives will lead to sales of US$ 1 billion in the next three days.

In an initial reaction, industry leaders were critical of the sales boost.

Nicolas Pino, leader of the rural association SRA, described the measures as “transitory”, as they will only last one month, while Carlos Achetoni, from the FAA agrarian federation, defended that only large farmers would benefit.

By the end of August, farmers in Argentina had sold nearly 52% of the 44 million-tonne crop of soybeans during the 2021/2022 season, according to official data, significantly below sales recorded in the same period of the previous season.