Corn dollar: how the government’s plan to moderate its impact on inflation

As expected, applying the update to the farm dollarwhich led to the differential exchange rate applied exporters of regional economies at $350 pick it up meat priceswhich rose up to 20% and put pressure on August inflation. Consequently, the government is implementing a plan to curb this dynamic and, as part of this, has launched a norm key of the Deputy Ministry of Agricultural Markets.

“Agriculture and commerce are working hard compensations for the pig, poultry and beef sectors to make up for it increase in the price of corn and, in so doing, seek to prevent the best price effect from being passed on to prices. exchange rate for exporters,” a source close to the government told Ámbito. And, to these initiatives, resolution 1631 was added at the end of July.

As he points out Field of application Salvador Di Stefano, expert in agricultural business and acknowledged city guru, “this rule extended the shipping obligation periods for corn exporters” to 240 days. This is the new maximum period of validity of Foreign Sales Affidavits (DJVE).

“Give yourself one Excellent Automatic Extension of 240 calendar dayson foreign sales affidavits (DJVE) with expiration of shipping period and/or automatic extension between 24 July 2023 and 30 September 2023for merchandise included in invoice No. 1005.90.10 (CORN), counted from the expiration of the automatic extension,” establishes the first article of the contested resolution.

That is, what is done is extends the deadline the exporter has to complete the shipment of grain abroad from the moment the sales license was obtained and its expiration (from 180 to 240 days elapsed).

Corn dollar: the results sought by the government

“This is a key measure because it suggests that the exporters they won’t put as much pressure on demand for corn in the market,” says Di Stefano. And it is that, in this way, they can liquidate cerealspay withholdings and you have 240 days to board.

Thus, the new arrangements result in a for the benefit of the governmentas it allows him to get the $2,000 million more quickly, as has been seen and, on the other hand, it is anti-inflationary measure because it means that as there is less pressure on corn demand in the domestic market as a result of the extension of deadlines.

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“The government is going to cash in BCRA and in the Ministry of Finance and the price of corn It should not increase that much,” predicts the analyst. And it is that he Export Incentive Program (PIE) that the government has in force ends on August 31 of this year and that left little margin of time for it exporter to be settled under this initiative, by its extension time limits for finalizing the shipmentresults in greater exportability with a dollar at a different price.

Let’s remember that the government brought back the dollar nine days ago (seven days of operation) farmer in order to encourage grain liquidations and that this has the effect of thickening his stocks Banco Centralon the one hand and the collection of taxes, for another. This announcement provided for an increase in price per dollar that each exporter charges $300 to $350 and the integration of dollar corn and malting barley into the program.

Corn, key to the farm dollar

The decision to include corn was key the success achieved for this program. Let’s remember that, until then, the farm dollar did not include the corn among the grains favored by the differential exchange rate and the main reason for this decision was that it is a key element for the poultry, livestock and pig industries as it forms the basis of animal nutritionwhich entailed a strong risk transfer to prices for its effect on the value of meat, as seems to be the case nowadays.

This meant that there was a lot of corn outstanding, there were 34 million tonnes of which were lying dormant waiting to be cleared. devaluation, or, a differential exchange rate for the maiceros.

That’s why he dollar corn it started with everything and, within that framework, the cupboards rebounded strongly, allowing her Central Bank (BCRA) rebuild their gross stocks with purchases of US$1,139 million in the official market in the first seven days of the program, within which producers have already liquidated more than 50% of $2 billion goal originally set.