The Chamber of the Oil Industry of the Argentine Republic (CIARA) and the Cereal Exporters Center (CEC), reported this Wednesday that during the month of April, companies in the sector settled the sum of USD 1,910 million, with an increase of 27% compared to March.
In relation to the same month of April 2023 (USD 2,416 million), when the “soybean” dollar scheme was in operation, there was a 21.5% drop in settlements in the sector. However, in the accumulated first four months of 2024 (USD 6,433 million) There was an improvement in income of 23% compared to the accumulated January-April 2023 (USD 5,237 million).
“The foreign exchange income for the month of April is the result of the export dollar regime in force since December 2023, the meager international prices and the impact of the weather on the corn and soybean harvest rate,” CIARA and CEC indicated. It must be remembered that since the Libertad Avanza administration, 20% of agricultural exports are settled in the stock market, at the “cash with settlement” exchange rate.
“Grain exports continue to work with high levels of idle capacity, as well as the oil industry, suffering permanent negative margins; something that grew this month due to the national strike of the oil unions that paralyzed the activity for reasons beyond the control of the industry,” stated CIARA and CEC.
The oilseed-cereal complex – which includes biodiesel and its derivatives – contributed 50% of Argentina’s total exports in 2023
They specified that “the monthly income of foreign currency, transformed into pesos, is the mechanism that allows us to continue purchasing grains from producers at the best possible price. The liquidation of foreign currency is fundamentally related to the purchase of grains that will later be exported, either in their same state or as processed products, after industrial transformation.”
Most of the foreign exchange income in this sector occurs well in advance of the export, an anticipation that is around 30 days in the case of the export of grains and reaches up to 90 days in the case of the export of oils and protein flours. . “This anticipation also depends on the time of the campaign and the grain in question, so there are no delays in the settlement of foreign currency,” the entities’ statement stressed.
In this sector, statistical comparisons between different periods are generally imprecise or inaccurate since the settlement of currencies is strongly influenced by the commercial cycle of grains, which depends on various and changing exogenous factors such as international price fluctuations, retraction of supply , different volume and protein value of the crops, climatic conditions, holidays, union force measures, regulatory modifications, tariff and foreign tariff barriers, phytosanitary or quality requirements of other countries, among other factors.
The oilseed-cereal complex, including biodiesel and its derivatives, contributed 50.1% of Argentina’s total exports in 2023, according to INDEC data. The country’s main export product is soybean meal (12% of the total), which is an industrialized by-product generated by this agro-industrial complex and which currently has a high idle capacity of close to 70 percent. The second most exported product last year, according to INDEC, was corn (11%) and the third was soybean oil (6.9%).
This Wednesday, soybean futures contracts fell for the second consecutive day in the Chicago Market, dragged down by the sharp drop in soybean oil prices and the strengthening of the dollar, which pushed up US agricultural products by making them more expensive for importers. .
Corn also fell, while wheat positions rose slightly, as traders assessed the likely impact on supply of dry weather conditions in the main producing regions of Russia and the United States.
The most active wheat contract on the Chicago Board of Trade rose 0.1% to USD 221.93 per ton, while the soybeans fell 0.5%, to USD 425.12 per ton, and the corn fell 0.2%, USD 175.17 by Ton.
At the beginning of 2024 the three contracts fell to four-year lows given the abundant supply and the accumulation of large bearish bets by speculative investors who anticipated lower prices.
In Argentinaone of the main soybean exporters, workers in the oilseed sector ended a two-day strike that had paralyzed shipments of soybeans, corn and wheat.
