The government began to assume the worst scenario for the worst drought in 60 years. The Ministry of the Economy continues to refine the numbers, while the negotiation of aid in the goals with the IMF is delayed, due to the impact of this phenomenon, the river bird and the war in Ukraine. According to Sergio Massa, they estimate a loss of US$9.6 billion in revenue dollars, compared to the football estimate of $14.2 billion expected by the market.
It remains to be seen what happens with the rains in the next three weeks to determine whether the damage will be extended or reduced. “To have a given update, you have to wait 20 days, the impact is only US$9,600 million with a focus on the lack of production in the wet core of the pampas, but there is a large production in northern Argentina, on the coast. and in the center and south of the province of Buenos Aires” in the letter the public,” they said.
In its latest provision Rosario Stock Exchange (BCR) production fell to 11.5 million tons of wheat, 27 million tons of soybeans and 35 million tons of corn, with falls of up to 36% compared to the last cycle. The economy was close to adjusted numbers for the private sector, but still in line with previous forecasts. The estimated soybean harvest fell from 37 to 34 million tons. “It is worse,” they admit in the country
In addition to production, the government monitors three other sensitive fronts. The first is the expansion of shipping to take care of the internal market, which involves less foreign currency. Last year, Massa exported wheat for 360 days between December 1 and February 28, 2023. At the end of Tuesday, it exported wheat for 180 days between March and July 1 and 31, almost 90% of exports in 2023.
Another factor is the temporary acceleration of imports from Brazil, Paraguay and Bolivia, which could represent US$2.4 billion. Sources from the export sector estimate that purchases to support milling and re-export soybean derivatives reached 1.5 million tons at this point in 2022, compared to 2 million tons today and could reach more than 8 million by 2022/23. double that of the previous cycle.
“So far, some 2 million tons have been imported, unfortunately, there are no possible measures to mitigate it, because there is no way to replace the grains, except for soybeans from Paraguay and Brazil, which is a palliative,” the exporter said. The amount – several million – would come from Paraguay, to reduce the idle capacity in the industry, which has already reached 68%. Thus, the process would reach its lowest level since 2008/09.
A third sign that attracts official attention is the type of grain produced by producers and collectors. The government believes that it is holding 6 million tons and that it is necessary to sell them, which can restore the reserves of the Central Bank. Private estimates range between US$1.5 billion and US$4 billion, but producers are waiting for the first dollar of 3 soybeans, after completing the exchange rate differential at $230 in December.
Thus, the collapse of the sector that generates the largest amount of foreign currency increases the pressure on the economy. For Ecolatina more stress on the plan to maintain the rise of the official dollar in that it avoids a prudent decline, involves goals with the Fund, affects the level of activity and the import restriction continues to pressure. inflation, which will add difficulties to sustaining price agreements.
For now, AFIP has reminded that it has started to evaluate measures in silo bags after the fall of 9.5% of real years in the collection of February. And customs has threatened the cereal companies Cofco, Cargill, Bunge and Dreyfuss for allegedly maneuvering to pay fewer detentions for soybean exports previously imported from Paraguay, for US$ 50 million. The introduction of a temporary regime thus remains before the authorities.
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