The need for dollars was stronger than ideology. It is the first time in a long time that the Government adopts a measure to benefit producers, in this case those who have soy. The “Massa Plan”, of guaranteeing a $200 dollar for those producers who decide to sell their soybeans, is too great an incentive to let it pass. Proof of this is the sales volume of producers, which could exceed 3 million tons in the first week of the new “soybean dollar”.
At the end of August, producers had unsold soybeans in their possession, pending price fixing, for a volume of close to 27 million tons. The pattern of sales by farmers had been drastically reducing week after week, to the point of reaching 150,000 tons in the last week of last month. If the oil industry processes 4 million tons per month, the math does not fail, at that stock replenishment rate (purchases for 600,000 tons per month) the factories ran out of physical soybeans to process in a very short time. The consequences, plant closures as they do not have soybeans to process; drop in production and exports of flour and oil; drop in foreign exchange income; loss of income from withholdings for the State, and negative Central Bank reserves. It would have been impossible for the Central to restore reserves in this scenario, which was considered highly probable.
In fact, the oil industry had been reducing its monthly grinding very sharply, with a drop in exports, mainly soybean oil. Meanwhile, Brazil increased its exports of flour and oil, occupying the markets that Argentina could not supply. The oil sector was going through one of the worst supply crises due to the lack of supply of soybeans available from producers for processing. The Government then decided to use the silver bullet by implementing a differential dollar for soybeans of 200 pesos per dollar, with the aim of encouraging producers to sell their soybeans.
The retention and the decision not to sell by the producers was based on the possibility of a devaluation. And the Government opted for a unique and very creative measure, to make a 40% devaluation, applicable only to the “soybean dollar”, with a maturity date of September 30.
The reaction of the producers was immediate for a very simple reasoning: with this new dollar and selling soybeans at $70,000 per ton, purchasing power improved by 40%. The same good that last week, before the measure was implemented, was bought by selling 100 tons of soybeans, today the producer can buy it by selling 60 tons. In other words, it improved the input/output ratio by 40%, whether it is used to purchase fertilizers, seeds, agrochemicals, machinery, or to pay for a service.
If the pace of soybean sales in the next three weeks is adjusted to half the volume of the first week, we will be able to reach the end of September with a total soybean sales volume of 7.5 million tons, for a figure equivalent to $4.5 billion. If we add the sales of corn, sunflower and other products, the global figure could exceed 5.5 billion dollars.