Argentine winter crops bring fresh dollars to a weak economy
In January, oilseed industry and grain exporters entered USD 1,756 million into the Argentine economy, versus USD 1,040 million in December 2018. Some analysts celebrate this fact saying that thanks to better harvests of wheat and barley, export companies are enhancing the income of dollars into the Argentine economy.
According to the press release of the Oilseed Industry Chamber (CIARA), this increase of export dollars is related to the purchase of these two winter crops by the exporters. In fact, 8,4 MMT of wheat, 1.3 MMT of feed barley and 0.6 MMT of malt barley are already purchased by the trading companies.
The CIARA’s press release stressed that exporters settle the dollars 30 days before the moment of the export itself, in the case of grains, and 90 days before when they export by-products of the soybean.
But despite the USD 1,756 million settled in January, this quantity was smaller compared with January 2018, 2017 and 2016 when currency liquidation oscillated between 1,840 and 2,500 million dollars.
But there is a huge difference between these years and the previous years when Kirchnerismo ruled the country. Between 2011 and 2015, dollar liquidation during January oscillated between 1,060 and 1,700 million dollars.
The Government remarked that during 2018, Brazil purchased 5.9 MMT of Argentine wheat, the largest amount since 2006. The local grain has a preference duty in that country thanks to the Mercosur agreement signed by Argentina, Uruguay, Paraguay, and Brazil.
The Government also is waiting for a good harvest that brings more dollars to the domestic economy, facilitating the electoral process (presidential election will place in October) stabilizing the currency exchange rate.
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