President Javier Milei encouraged farmers on Argentina’s Pampas to seize the moment Monday and sell their soybeans now after he eased currency controls, which weakened the peso by about 12 percent on official markets.
Farmers are starting to harvest their soy crop, worth billions of dollars in export revenues that Milei desperately needs at the Central Bank. But, so far, they have traded it at a crawl: forward-selling is the slowest in decade, the Rosario Board of Trade said on Friday.
In addition to letting the peso float — though only within a set range — Milei has also trimmed export tariffs for harvest season only. For soy meal, Argentina’s biggest single export, the rate is at 24.5 percent through June 30 instead of 31 percent.
“Tell the farmers that if they need to sell they should do it now because the export tariffs are going back up,” Milei told El Observador radio station.
It’s unclear if all growers will heed Milei’s warning since three factors influence their decision to sell soybeans: global prices, the exchange rate and export tariffs.
Prices of soy meal are trading near five-year lows in Chicago amid Donald Trump’s trade war. And despite Monday’s plunge in the currency on official markets, to 1,200 pesos per dollar, that’s only mildly better than a special rate that farmers had been receiving of 1,130.
by Jonathan Gilbert, Bloomberg
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