Soy business increases in Argentina after preferential exchange, says stock exchange

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Argentina’s daily soybean trade volume has reached its highest level in five and a half years, the Rosario grain exchange said on Tuesday (6), after the government introduced a preferential exchange rate, the “US dollar.” soybeans”, to boost exports.

The Rosario stock exchange said in a report that Argentine soybean operations recorded on Monday (5), the first day the exchange rate rule took effect, were close to 800,000 tonnes, the highest volume traded since the beginning of 2017.

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On Sunday, Argentine Economy Minister Sergio Massa announced new temporary incentives for soy producers to sell more of their stocks, accessing a better exchange rate, in a bid to boost exports and foreign currency reserves.

Argentina is the world’s largest exporter of soybean oil and meal, as well as the third largest in soybeans, a market led by Brazil. But farmers have been holding oilseed stocks longer than they did last year as a hedge against the potential devaluation of the local peso.

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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.

Traders and analysts said the flurry of soy business was already impacting local markets.

“There is an unusual sale of soybeans and this is in line with what was announced by the government,” said Armando Torre, a local currency analyst.

“Everything suggests that an avalanche of dollars is coming, useful for central bank reserves, although none of the economy’s biggest underlying problems have been resolved.”

Source: CNN Brasil

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