Argentine government announces differential exchange rate for soybean sector and regional economies

Argentina’s Minister of Economy, Sergio Massa, announced yesterday, Wednesday, a different exchange rate for the soybean exporting sector and the rest of the regional economies to alleviate the effects left by the drought, increase exports and strengthen international reserves.

“We have decided to move forward not only with soybeans but also with regional economies; soybeans and their derivatives, and regional economies”, said Massa when he presented the third edition of the Export Increase Program to officials and producers.

The program consists of a fixed exchange rate of 300 pesos per dollar that will be aimed at oilseed exporters and exporters of other products such as yerba mate, peanuts, citrus, fruits, rice, and wood, among others that are generated in the different regions and provinces of the South American country.

The measure will be in force for the soybean sector from next Monday, April 10, until May 31.

Massa says the measure “is to improve the price for the producer who today has less volume due to the drought, in order to somehow palliate losses but also to encourage Argentine exports and strengthen reserves”.

For the rest of the products, the differential exchange rate will be in force from April 8 to August 30, said the head of the financial portfolio.

“We want this greater gain and this recovery of competitiveness to be reflected in the prices of the domestic market, and for this from tomorrow until next Friday, we are going to incorporate one by one the regional economies”, he said.

The Minister explained that for the incorporation of the new sectors into the Export Increase Program, three conditions would be established: participating in a government program of price care, guaranteeing employment, and maintaining the volume and supply of the products.

Massa assured that the measure aims to open new markets, increase the volume of exports due to a greater accumulation of reserves, and guarantee that “Argentines will consume their food produced in Argentina at a fair price”.

On the other hand, the official announced a series of fiscal measures to alleviate producers in the face of the severe effects of the drought.

In addition, he informed about a third measure aimed at exporting companies that have not made foreign currency settlements for some 3.7 billion dollars, evading their obligations before the Central Bank (BCRA).

The eventual sanctions will consist of canceling the tax identification code of these business organizations, disabling them from carrying out commercial operations, and the impossibility for these companies to access the foreign exchange market.

Minister Massa indicated that the three measures announced on Wednesday seek to strengthen the Argentine economy in times of “uncertainty and volatility” at the international and local levels.