In the midst of his anger at the measure unilaterally taken by the Central Bank -which prohibits the purchase of MEP dollar to soybean farmers benefiting from the special exchange rate-, the minister Sergio Massa tThere was at least one reason for relief: the income of dollars from the export of grains returned to have another day at full pace, with the revenue of US$335 million and the entry of trucks into the port area of Rosario at the same levels as in recent days.
It was the only joy in a day where criticism rained down on the economic teamthe blue dollar rose and legal action was insinuated against the new “stock” in the field.
For now, the new measure is already generating a political cost: the evidence of new interns within the Government, just when Massa is struggling to impose an image of a minister who, unlike his predecessors, has the entire “button panel” under his control. .
However, the soybean affair and the MEP dollar made it clear that the Secretary of Agriculture, John Joseph Bahillo, learned of the Central Bank’s measure a few minutes before the resolution was published. In other words, it was a surprise for Massa himself.
In fact, it transpired that in the BCRA’s own board of directors there had been an interdict between the president, Miguel Pesceand the vice, Lysander Cleriwho responds politically to Massa.
The lack of coordination was laid bare when, a few minutes after the resolution was published, a clarification came out stating that the ban did not apply to individuals but only to export companies. It was the most that Massa could obtain, which -according to what Secretary Bahillo would later tell- he had asked for that the measure would be flat and smoothly suspended.
“We don’t want to change the predictability that we had given to the producers,” said Bahillo, a complete confession about the awareness that exists in the minister’s team regarding the loss of credibility to which the Government is exposed in the face of the agricultural business.
Juan José Bahillo, Secretary of Agriculture, did not hide his disagreement with the BCRA measure and confessed that he found out shortly before publication
In stark contrast, the director Agustin D’Atteliswho usually expresses the opinions closest to the position of Kirchnerism, justified the measure with confrontational language, again accusing the producers of being motivated by the desire to destabilize the economy.
And while the political noise caused by this new inmate was coming to light, already in the countryside the possibility was beginning to be insinuated that the new measure can be appealed to courtarguing that there is no legal basis for a sector of society to be prevented from buying a certain financial asset.
He was explicit about it. Horaco Salaverri, president of the Carbap union, who described the measure as “Totally discriminatory nonsense.” The manager recalled that the anger in the field had already been growing due to other controversial resolutions, such as the punishment with a more expensive interest rate for those who had not adhered to the “soy dollar” regime.
And, on the other hand, he denied that there was a commitment on the part of the Rural Liaison Table in the sense that the pesos received from the export of soybeans were not used to buy dollars. Along the same lines, the president of the Rural Society, Nicholas Pinedescribed as “an ambush” to the measure.
As background music for this new controversy, a piece of news arrived that is very similar to a “boomerang effect”: the new rise in the blue dollar.
Again, the magnifying glass on the blue
Since the “soybean dollar” is in effect at $200, foreign exchange earnings from soybean exports It already exceeds US $ 4,000 million and it is estimated that there will be no inconvenience in reaching the US$5 billion that Massa had set as a goal.
However, what seemed like an oiled mechanism now entered the realm of doubt. For example, the chief economist of the Agricultural Foundation for the Development of Argentina (FADA), David Mizzohe asked himself: “Why sell a few tons of soybeans if you are going to exclude me from the MEP dollar forever?” From this point of view, he considered that “with this measure the Central Bank kills the soybean dollar. It is very likely that sales will fall substantially from now on.”
In any case, it will end up being an achievement with a certain bitter taste for the minister. It already had the first signal in this regard in the financial market: the blue dollar jumped $10 to close at $287, after several weeks of calm. And the debate on if another stage of rise will begin with a view to $300.
The blue dollar increased 10 pesos and was once again at the center of speculation, with the conflict in the countryside as a background
Even before the Central’s measure was known, there were analysts who spoke about the strikingly low price of blue and predicted a correction. Now, in the midst of the debate about the “new trap” for the countryside, there is also a political reason for this acceleration.
From the field, reviews were mixed. was talked about game rule changesof violation of rights, of betrayal of the trust of the producers, of lower incentives for investment in the next campaign.
“The measure announced and implemented by the Central Bank is clearly going to have an effect on the flow of sales from producers and collectors and cooperatives to exporters,” was the warning Gustavo Idigoraspresident of the Chamber of the Oil Industry and the Cereal Export Center.
And the director made it clear that the “patch” that Massa later included in the Central norm – the clarification that the prohibition only applies to companies but not to individuals – was not enough to change the mood in the field. The explanation is that the producers that manage themselves individually represent a small volume of exportwhile most of them operate under the figure of commercial companies and will be affected.
In fact, one of the reasons for the bad mood that the implementation of the new dollar had created was that small producers, those with less financial backing to speculate on the exchange rate, had already sold their production when the record prices of the international market occurred. . On the other hand, the largest volume producers, as well as land owners who rent to third parties for cultivation and charge in quintals of soybeans they were the ones who had retained the product in the silobags.
Pulling the weights of the soybeans
Fearing that there would be a “stop” in marketing, the Central Bank had to go out and remind that the regime of special “dollar linked” bank accounts will continue in force for those agricultural firms that are now excluded from the dollar market.
But the union Ciara did not hide her concern about a measure that she considers “harmful to the soybean chain.” And he left floating the question of what will happen to the pesos of those producers who will seek to maintain the value of the sales recently made.
For the Central, the destination of the pesos received from soybean exports in September became an issue of primary importance: it wants to avoid an aggregate demand on the exchange market
The come up from the blue He added a note of concern in this regard: after all, it is a small market -as the officials themselves are always in charge of pointing out- that almost always moves a volume of less than US$10 million. This implies that, with a small part of the pesos received from soybean exports going to that market, a strong upward effect would already be felt.
There are those who argue that those soy farmers who are now denied access to the MEP will not necessarily go to the blue because it would imply taking a step towards informality and the impossibility of justifying the income of pesos later when the dollars are resold. But, even so, the mere dissemination of the restrictive measure was enough for again you breathe nervousness in the foreign exchange market.
In any case, what is clear is that the priority of the president of the BCRA is to prevent the approximately $580,000 million net that will be poured into the market this month for soybean exports from becoming an aggregate demand in the MEP dollar market.
Pesce’s intention is that these pesos remain in the financial system, especially after it was decided to raise the interest rate to a level of 75% -which implies an effective annual rate of 107%.
In fact, the biggest concern expressed by independent economists in recent days refers to the monetary impact of the “soybean dollar”. The fact of buying at $200 and then selling at $140 supposes a monetary expansion that for many will have consequences both at the level of inflationary pressure and exchange rate.
A report from the MQ consultant projects that, if the expansion due to the difference between the soybean dollar and the official dollar is added to the interest payment for Leliq and other liabilities, the result of the sum is disturbing: in just one month, $970,000 million will be turning over to the market, equivalent to 22.5% of the monetary base.
The effect of the drought raises fears of a low level of foreign currency income from agricultural exports next year and there are already warnings of exchange rate turbulence in the summer
Troubled summer ahead?
But the political noise and short-term financial turbulence may not be the most serious consequence that this measure could bring against soybean exporters. Producers are already warning that, above all, the problem is that will act as a disincentive for investmentjust at a time when decisions are being made for the 22/23 campaign.
The spirit of the producers had already been hit by the climatic inconveniences. The water maps that were released in recent days show large red and orange spots – those that identify areas with a lack of water in the soil – and it is estimated that barely 20% of the arable land is in good condition for planting.
The “La Nina” phenomenon is raising fears of a drop in production volumes in the main crops, as a cause of the drought. And, in addition, now the producers allege to have reasons of distrust in the financial plane.
For Massa it is the worst news, especially if one takes into account that summer is traditionally the season where dollars are scarceand not by chance, Argentine economic history identifies the hot months with the occurrence of devaluations.
The last two summers did not produce the crises that economists had predicted, thanks to the occurrence of exceptional situations. At the beginning of 2021, due to an unexpected rise in international prices, as well as the delayed settlement that occurred after a union conflict. And last summer, due to the record wheat harvest, in the midst of a historic rise in prices.
But it’s hard to win the lottery three years in a row, and Massa knows it. That is why the speculation among producers was that, as a way to stimulate the liquidation of exporters, it could be repeat in december a scheme like the soybean dollar in September. But of course, for that you need trust on the other side of the counter, and it is precisely what was hurt after the “soy exchange trap” decided by the Central Bank.