Nov 29, 2022
New "Soybean Dollar" Program in Argentina
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
The Argentina government announced a new "soybean dollar" program that will start on Monday, November 28th. The program will allow dollars generated by soybean sales to be exchanged for pesos at a rate of 230 pesos per dollar. This preferred exchange rate is above the official rate (currently around 165 pesos per dollar), but below the black-market rate. This program, which is scheduled to run through the end of the year, is like the one they instituted during September where soybean dollars were exchanged for pesos at the rate of 220 pesos per dollar.
The program in September was very successful and it is estimated that farmers sold 13 million tons of soybeans during the month. Once the program ended on September 30th, farmers stopped selling their soybeans in anticipation of a new preferred exchange program.
It is estimated that approximately 12 million tons of soybeans still need to be priced in Argentina and the government is desperate to increase its international currency reserves and for the tax revenues generated by soybean exports.
A new "soybean dollar" program would create headwinds for the Argentine crushing industry that would need to compete with the export sector. It would also increase competition for U.S. soybean exporters.