Argentina authorises delay of soy exports

Delays authorised for up to 60 days
calendar icon 12 April 2023
clock icon 2 minute read

Argentina has authorised exporters to delay soy shipments for up to 60 days, Reuters reported, citing the Argentine government on Tuesday, as the country battles a historic drought that has hobbled grains production and trimmed inflows of critical foreign currency.

The announcement follows a decision by the government in March to delay shipments of corn by up to 180 days and after it rolled out similar measures for wheat late last year. It gives exporters more time to physically ship previously agreed sales.

Argentina is caught in a delicate balancing act. It needs to spur grains exports to bring in much-needed foreign currency and refill depleted central bank reserves, while ensuring domestic supply to rein in prices, with inflation running at over 100%.

The measure, announced in the official gazette, comes a day after the South American government launched a preferential exchange rate scheme to spur soybean exports from the country, the world's top exporter of processed soy oil and meal.

The "soy dollar" scheme, which offers an exchange rate some 40% higher than the controlled official FX rate for sales of soybeans, recorded few takers on Monday, with would-be participants citing insufficient technical details.

The Tuesday resolution, however, also laid out some specifics of the scheme, which may spur increased trades.

"It is likely that we will see a bit more movement in the afternoon," said Eugenio Irazuegui, an analyst at local grains brokerage Zeni.

"Various points were clarified in the resolution that was published today," added a source at another brokerage in Rosario, Argentina's main port for grains exports. The source spoke on condition of anonymity.

Argentina is hoping the preferential exchange rate for soy exports can spur a wave of sales and help bring in much-needed foreign currency to build up depleted central bank reserves.

The drought, between early last year and March, led to the wheat harvest being cut in half versus a year earlier and repeated cuts to corn and soy forecasts, with the soy harvest expected to be the worst in almost a quarter of a century.

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