Argentina announces fourth soy dollar scheme to boost sales

Argentina’s Economy Minister and candidate for presidency Sergio Massa announced on Sunday a new preferential exchange rate program to boost soybean sales and increase soybean crushing in the country.

The new program allows crushers to buy 25% of beans using the financial dollar, a 785 pesos to the dollar exchange rate, while the remaining 75% will be traded at the official rate of 350 pesos per dollar, resulting in an average of 440-450 pesos to the dollar exchange rate.

A decree detailing the timing of the new soy dollar and other measures is yet to be released, but some observers speculated it might be announced on Friday, September 1.

Unlike the previous versions of the soy dollar, there is no goal for revenues or traded volumes so far.

“I think this is good news for the crushing industry, since liquidation is very low, at around 1 million mt per month, and there are 5 million mt with prices yet to be fixed,” analyst Javier Preciado Patiño told Agricensus.

The goal is to boost crushing as soybean processing reached the lowest volume in the past 15 years in the first quarter of the 2023/24 crop year, with 11.9 million mt processed between April and July, the Rosario’s Exchange (BCR) said.

Around 8-10 million mt of soybeans are available to be traded in Argentina, including the ones with prices yet to be fixed. 

 “This will allow the industry to maintain its activity and benefit the producers who need to sell, while it's also positive for the government because it's generating an influx of foreign currency in the middle of an election campaign,” Preciado Patiño said.

"The question is how much soybeans would the producers be willing to sell with an exchange rate of around 450 pesos." 

The first soy dollar scheme was implemented in September 2022 with a 200 pesos per dollar exchange rate, the second one was launched in November 2022 at a 230 pesos exchange rate while the third soy dollar was implemented in April 2023 at 300 pesos per dollar.

A corn dollar was implemented in July 2023 at a 350 pesos per dollar rate.