Apr 03, 2023
Argentina Announces a New "Soybean Dollar" Program
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Argentina's Economic Minister confirmed late last week that the government would move forward with a new "soybean dollar" program to encourage farmers to sell their soybeans for needed exports. A similar program was conducted twice last year, but this year's program has a twist. It will not just be for soybeans, it will include other agricultural products such as wine, rice, peanuts, and maybe other products as well.
The program will give producers a more beneficial exchange rate for 90 days when they sell products abroad instead of the official peso value which the government has kept artificially high to avoid devaluation. The preferred rate has not yet been announced, but the current official rate is 209 pesos per dollar and the black market rate is about 400 per dollar. This program is expected to spur farmers and exporters to ship their grains and avoid hoarding.
The preferred rate will take effect in April with other preferential rates for targeted sectors in the months ahead. More details should be announced soon.
The government needs every dollar it can from exports to boost the central bank's reserves and ensure it can meet payment obligations and cover its debts to creditors and the International Monetary Fund (IMF).