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Sun Sep 11, 2022, 07:40 PM

Exchange rate incentive prompts record soy exports in Argentina

Argentine Agriculture Minister Juan José Bahillo announced that the Export Increase Program, which established a differential exchange rate of 200 pesos per dollar for soy exporters during September, was “a success.”

Some 4.6 million tons of soybeans and soy products - mainly flour, oil, and animal feed - were exported within a week after the program's announcement by Economy Minister Sergio Massa, earning the hard currency-strapped country over $2 billion in foreign exchange.

The measure, Bahillo explained, “allowed producers to receive an average price almost 40% higher than the one they received on August 31st - which is practically equivalent to a reduction in export taxes to zero.”

Anticipating - some say, pushing - a devaluation, Argentine farmers and exporters had stockpiled an estimated 28 million tons of grains (mainly soy) - equivalent to $14 billion in export revenue.

“(The incentive) motivated sales to speed up,” Bahillo noted.

Soy exports - which accounted for 30.6% of the country's $78 billion in merchandise exports last year - pay the highest export tax rates: 33%.

Export taxes brought in over $10 billion in revenue last year - equal to 11% of federal revenues, and 13% of goods exports.

At: https://www-eldestapeweb-com.translate.goog/economia/juan-jose-bahillo/bahillo-destaco-que-el-dolar-soja-permitio-el-ingreso-de-mas-de-us-2-000-millones-en-una-semana-202291114500?_x_tr_sl=es&_x_tr_tl=en&_x_tr_hl=en&_x_tr_pto=wapp

Argentine Economy Minister Sergio Massa makes a point during a meeting with farming representatives shortly after his appointment last month.

The Export Increase Program he announced last week - which, through September, offers soy exporters a preferential exchange rate of 200 pesos (compared to an official buyer's rate of 142) - has succeeded in unlocking some of the $14 billion in estimated grain stockpiles for export.

While Massa had envisaged some $5 billion in soy exports this month under this program - over $2 billion were exported last week alone.

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