BUENOS AIRES (Reuters) – Argentine farmers face pressure to sell soybean stocks as government rolls out carrot-and-stick incentives Measures and penalties for stockpiling around the world. The largest exporter of soybean oil and soybean meal and the third largest exporter of green beans.
The government announced on Sunday the preferential exchange rate for soybean exporting countries, the official exchange rate of 200 peso per dollar to approximately 140 peso compared to. On Thursday it said farmers hoarding soybeans would face higher financing costs and work harder to drive sales.
“They try to lure farmers into selling, and then we see a pressure strategy on the other side of the coin,” Jorge Chemes, president of Argentina’s Rural Confederation (CRA), the main agricultural agency, told Reuters on Friday.
Sales have surged to about 3.6 million tonnes this week since the new exchange rate, dubbed the “soybean dollar,” effective Monday. This helps the central bank build reserves, although the government still wants more.
This South American country is also a major producer of corn and wheat, is the largest global debtor to the International Monetary Fund (IMF), and needs to rebuild its foreign exchange reserves to meet the future obligations of its creditors obligation.
Argentina’s soybean industry as a whole brings in US dollars 21 The country’s export earnings last year amounted to US$500 million and is the country’s main cash crop . It is seen as key to rebuilding depleted foreign exchange reserves.
However, with inflation exceeding 70% and the economic downturn, fears of currency devaluation, local farmers hold more than last year of grain, as a proxy for the coveted dollar for export pricing.
Nicolás Pino, head of Sociedad Rural Argentina (SRA), another important agricultural agency, criticized the new threat of increased financing costs for farmers who hold soybean stocks exceeding 5 percent of their production.
“The rules must not be changed, they must be fair, because operating the supply chain in this way is becoming complex and changing,” he said.
The chemistry reflects this emotion.
“Just where the producer needs attention, with special financing, he is being punished,” he added, adding that the move would hurt the need for financing to build a business peasants. “What do they want from the agricultural sector?”
The Agriculture Secretariat declined to comment.