BUENOS AIRES – Argentina’s government is planning a new “soy dollar” preferential exchange rate for farm exports, a government spokesman said, as the major grains producer looks to spur shipments amid a severe drought hitting harvests.
Under the plan, first reported by local media citing Economy Minister Sergio Massa, the preferential rate would come into effect in April, with other preferential rates for targeted sectors in the months ahead. The soy dollar rate was used twice last year to stimulate sales.
“It is an export-boosting program that aims to facilitate the capacity and compliance of our exporters’ contracts in the year of drought, understanding the difficulties that our producers suffered,” Massa told Argentine media in Washington according to Reuters.
Argentina, the world’s top exporter of processed soy oil and meal, has been hit by one of its worst droughts in history over the last year, in which its 2022/23 soy, corn and wheat production was hit hard, denting income of dollars.
The indebted South American country is in desperate need of foreign currency to refill depleted reserves and ensure it can meet payment obligations and cover its debts to creditors and the International Monetary Fund (IMF).
Argentina has tough capital controls which restrict access to dollars and which have created popular parallel exchange markets, where greenbacks trade at twice the official rate.
The so-called soy dollar should spur farmers and exporters to ship their grains. Normally they have to exchange their dollar revenue back into pesos at the less attractive official exchange rate, which can encourage hoarding.
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