Argentina’s soybean farmers speed up sales after FX boost

Argentine soybean farmers have sold around 57% of the 2021/22 crop, the agriculture ministry said on Tuesday citing data through last week, reflecting a boost after the government offered them a preferential foreign exchange rate.

Argentina last week bumped up the exchange rate in an effort to speed stalled sales and replenish dwindling foreign currency reserves, after many soybean farmers held off selling their product due to growing speculation of a devaluation of the country’s peso currency.

The South American agricultural powerhouse is the world’s largest exporter of soybean oil and meal, a major corn and wheat supplier, and a key source of hard currency for the government.

The Sept. 5-7 boost in soybean sales came immediately after the government bumped up the value of the country’s cash crop by allowing sales to tap a 200 pesos per U.S. dollar exchange rate, compared to the tightly controlled official rate of about 140 per greenback.

During the first week of September, farmers sold 2.1 million tonnes of soybeans compared with just 268,100 tonnes the previous week, according to agricultural ministry data.

At the same time last year, close to 64% of that season’s slightly larger soybean harvest had been sold.

Meanwhile, almost two-thirds of Argentina’s 2021/22 corn harvest, estimated at 59 million tonnes, had been sold through last week, official data showed, slightly topping sales from the same time last year.

Planting season kicks off this month after an unseasonably dry winter, pushing many farmers to plant soybeans over corn.

Some 30% of Argentina’s estimated 5.2 million tonnes of wheat from the upcoming 2022/23 season had also been sold, according to the Rosario Grains Exchange.

The exchange said wheat exports for the season are seen at around 12 million tonnes, down from 15 million tonnes during the previous season.
Source: Reuters (Reporting by Belen Liotti; Writing by Kylie Madry; Editing by Richard Pullin)