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Mumbai, 12 April (Commoditiescontrol): In response to a historic drought that has affected grains production and trimmed critical foreign currency inflows, the Argentine government has authorized exporters to delay soy shipments for up to 60 days, according to a resolution released on Tuesday.
This comes after a similar decision to delay shipments of corn by up to 180 days in March and measures for wheat late last year. These measures allow exporters to ship previously agreed sales at a later date physically. Argentina is attempting to balance the need to spur grain exports to boost foreign currency inflows and refill depleted central bank reserves while ensuring domestic supply controls inflation running at over 100%.
The announcement follows the government's launch of a preferential exchange rate scheme on Monday, aimed at spurring soybean exports from the country, which is the world's top exporter of processed soy oil and meal. The "soy dollar" scheme offers an exchange rate approximately 40% higher than the controlled official FX rate for sales of soybeans. However, on the first day of its launch, few took up the scheme citing insufficient technical details.
The resolution released on Tuesday provides more specific details of the "soy dollar" scheme, which may encourage increased participation. Analysts predict that the market will likely see more movement in the scheme after the resolution was released. Argentina hopes the preferential exchange rate for soy exports will help bring in much-needed foreign currency to build up depleted central bank reserves. The drought, which lasted from early last year until March, led to the wheat harvest being cut in half versus a year earlier and repeated cuts to corn and soy forecasts. As a result, the soy harvest is expected to be the worst in almost a quarter of a century.
(By Commoditiescontrol Bureau; +91-9820130172)
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