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Agriculture projects historic harvest but asks for devaluation and not to increase withholdings on industrialized goods

The Rosario stock market indicates that the current cycle will be above what was harvested in the 2018/19 campaign. However, the dollar’s movement is tied to a crawl of 2% monthly and the proposal to increase withholdings from 31% to 33% for products derived from soybeans condition the incoming liquidation.


After the historic drought that the last campaign went through, The new 2023/24 harvest presents a much more auspicious performance. “It would be the second largest in historical terms,” they anticipate in the sector. However, there are two factors that strain the owners of the dollars: the exchange rate without major movement and the increase in withholdings of 2 points on industrialized soy products.

The numbers presented by the Stock Exchange generate enthusiasm in the agricultural sector. The organization estimates a strong recovery after the “disaster” that the 2022/23 harvest meant, although with different realities depending on each grain. Total production could reach 137 million tons, 65% more than the volume obtained in the previous campaign. If this figure is confirmed, it would be the second largest production in history, only behind the 140 million in the 2018/19 cycle.

Based on these production numbers, The entity projects that agriculture will export almost 100 million tons, 65% more than the total estimated to be exported in the current cycle. “The strong recovery in production expected for the new campaign allows agriculture to once again position itself as a fundamental contributor of genuine foreign exchange for the country’s economy,” says its latest report. The organization estimates that 59 million tons of corn, 50 million tons of soybeans and 14.5 million tons of wheat can be exported.

In terms of foreign exchange earnings, the picture looks like this: The soybean sector would once again emerge as the main export complex, with more than US$20,000 million – compared to US$13,700 million in 2022/23 – but the strong recovery of corn also stands out, with a contribution of US$ s8.3 billion. The wheat complex, meanwhile, would generate shipments of US$2.4 billion, double what was achieved in the last campaign. Thus, the export of grains and byproducts “would represent close to 45% of the total US$75 billion projected to be exported in total from the country by next 2024,” emphasizes the Stock Exchange.

The first results of the favorable campaign will arrive between April and May. However, agriculture presents two factors that will condition the income of foreign currency. The first has to do with the exchange rate, which remains under the dynamics of the monthly crawling peg 2% after the 118% correction. “The price has deteriorated and international prices have fallen. With an inflation of 25%, an increase in inputs and fuel and a dollar running at this rate, we are going to be in trouble,” defined the former Minister of Agroindustry of Mauricio Macri, Ricardo Buryaile on Radio 10.

The agricultural producer clarified that one export dollar was already priced at $640. “That means an increase for the field of around 20%, not 118%,” he mentioned. At the moment, the dynamics of the sector itself indicate that January and February are not months of strong liquidation. This last month could mark the income of dollars from wheat, but not significantly.

A representative of the export sector spoke with Ambit and delegated the situation to the producers’ estimates. “As much as we would like to buy everything from him, if the producer believes that the value of the dollar is not what he wants, he probably will not have a quick sales flow,” he said. Exporters highlight that the improvement in the exchange rate in real terms “was important” but, considering international and local inflation, the momentum it acquired “would be lost quite a bit” and, if there were no changes, the dollar would be “behind” to early March.

Another point of conflict has to do with the proposal of increase in withholdings of industrialized soy products from 31% to 33%, which would hinder the possibility of negotiating an advance of foreign currency until the harvest. “There is a lot of anger about the increase in two points,” they highlight. CIARA-CEC already warned this two weeks ago in a statement: “The Government is unaware that the tax increase will cause less soybean grinding, with the consequent reduction in exports of industrialized goods. This situation will generate a drop in foreign currency income and therefore tax revenues.”

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