The government has been threatening for some time with an improvement in the exchange rate for soybean producers due to the need to obtain dollars. But according to analyst Salvador Di Stéfano, in reality, “the government has nothing to offer the countryside, it is very complicated.” In an interview with field bugs explained why.
“We did a simulation. If the government offers the field a dollar close to the MEP or Stock Exchange, in the first place soybeans would go from 53,000 to 112,600 thousand pesos. If the sale of millions of tons of soybeans were generated, the Central Bank would automatically receive 1,664 million dollars but would have to issue 349,200 million pesos to pay the producers”.
Then he indicated: “Those 349.2 billion pesos that would be issued would be 8.2% of the entire monetary base, of all the twine that is in the market and the government should withdraw it so that it does not impact devaluation and for that place more leras in the banks and it does so at a rate of 70%, so all this is uneconomical. The government is detonated.”
The economist explained that, since the demand for money is nil, the first thing that someone who has pesos does is get rid of them by buying dollars, supplies or spending them on goods or services and that would drive inflation and the value of the dollar that reflects the little value Of weight.
Listen to the interview:
Di Stéfano considered that the agricultural sector needs its assets to be settled at a single exchange rate and that it is not feasible for it to give a benefit to a certain sector as is intended with the soybean dollar that never saw the light of day.
“If they do it for soybeans, why not for wheat? That will be asked by the producers and so everyone could expect the same. So what should the government do? Have a single, comprehensive program with a single exchange rate,” he recommended.
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The analyst pointed out that as long as there is a gap of 120% between the financial dollar and the official dollar, to which export duties must also be subtracted, the sale of grains will not flow.
“In fact, we have a commercial and financial dollar, the one for exports and the one for supplies at 300 pesos, and you have a 120% gap between the wholesaler and the commercial one, when in the 1980s that gap was 20%.”
-And how does Salvador get out of this?
-You have to build trust and take courageous measures. But Massa cannot because he is on the ideological frontier of the government. On top of that, they tell the producer that he is going to get a soybean dollar at 200. And what does the man in the field do? He waits, he doesn’t sell and there are fewer and fewer soy sales.
For the analyst, in this context, the CCL dollar (counted with liquidation), the stock market dollar and even the blue dollar will climb to 400 pesos by the end of the year and to 600 pesos by April 2023.
“The companies that want to import the official cannot, so they do it with the CCL. If everyone acts like this, its value increases and that is why I think that at the end of the year it will be at 400 pesos. Now from 400 to 500 pesos there is a jump of only 25% and from 500 to 600 pesos of only 16%. With the inflationary rhythm of Argentina I am falling short in the forecast, I am being good with the government”.
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-So what will happen to the economy and the government?
-The government is going to wear it as a hat, because when Alberto won, people sold soybeans, wheat and corn for fear of a rise in retentions and in August 2023 the opposition is likely to win and the producer is going to retain because he expects them to go down the gap and/or the retentions. I would tell Massa that (if he wants liquidations) lower the gap to the field and withholdings… Otherwise they will not sell you but nobody in the sector says that.
Di Stefano added: “Argentina is going to high inflation and devaluation because of these mistakes and we don’t say what we have to say. I am overheated with the referents of the field. We have 5 months of high inflation without rising wheat, corn and property. In real terms, all products fell and that does not appear in any national media, but when it rains and the producer withholds, he will be the villain.
He also pointed out: “The leaders of the field have to go out and say this, when the government tells them that they have to sell soybeans, they have to tell them that we sold 50% of soybeans, 70% of corn, 95% of wheat and What more do you want… That I sell you your underpants?”
In this context, he explained that the productive panorama is not at all promising: “On top of that is the damn drought that will generate enormous risk. The field looks like asphalt. And this is going to attach to livestock production, milk and agriculture. Are the nearly 18 million tons of wheat expected to be produced? Meanwhile, the government intends to solve the deficit by collecting in advance the export duties of products that have not yet been generated”.
“If from the sector we don’t alert, we don’t complain when they blame us, we have to be a soldier because everything is going to go up because of the dry spell, because nothing has increased for 6 months and the sector is in bankruptcy. But let’s not let them tell us that we are the dirty ones because food prices increase “.