Devaluation of the peso stimulates sales of Argentine soybeans

Argentina will depreciate the peso against the US dollar by more than 50%, to 800 pesos for 1 dollar, as well as cut energy subsidies and cancel public works tenders, which is an economic shock therapy aimed at resolving the worst crisis in the country in the last decade. This was stated by the new Minister of Economy of Argentina Luis Caputo.

The devaluation stimulates the sale of basic agricultural products in Argentina, say analysts of SAFRAS & Mercado.

“The most important aspect of the economic situation in Argentina is the possibility of significant progress in soybean marketing after this currency adequacy. Taking into account the total supply in Argentina, the industry has about 4.5 mln tons to continue purchasing and increase soybean processing,” – said the analyst Bruno Todon.

Regarding wheat, analyst Joaquin Azpiros Arias adds that there have been improvements in the solvency of exports in the domestic market and profitability, measured in MEP dollars.

“Commercialization of wheat is lagging and we have a scenario of financial needs from producers who are promoting their crops, increasing availability. We believe that those who can wait can get higher dollar values per ton as the grain shortage becomes relevant,” reports Azpiroz Arias.

Tags: soybean, wheat, Argentina, export