Dollars and drought: low currency settlement expectations for agro-exporters for March

The ravages of drought seem endless. After a period of two months with currency inflows at historically low levels, due to weather conditions and also partly due to last December’s settlement advance to seize the opportunity that the “soybean dollar 2” presented to Grain exporters, March is heading towards set a new milestone. Far from the record that marked the flow of dollars in March of last year, this year the quarter will close with one of the worst records in decades.

It’s that, so far this month, only $99 million has been liquidated, which equates to a daily average of 33 million USD And, even though the month has only just begun, the outlook does not look encouraging: not only is this average 84% lower than that of March last year, but it is also 62% lower than the average of the last two decades. The number is so meager that at this rate, this month will see the lowest dollar revenue for March in the past 20 years.

Specifically, you have to go back to 2003 to find such a low dollar income from agricultural exports, when the figure was just over $50 million. It is worth mentioning that also in 2020, the flow of foreign exchange from agriculture was sordid, since exporters had also anticipated exports to avoid the increase in withholdings that the new government was supposed to impose in December 2019. in this context, almost double the forecast of sector analysts for this month.

“Comparing March to March of each year, this year 2023 was the worst daily settlement average since 2003. That’s down 62% from the average (since that date),” the statement said. cereal operator and economic analyst of the Romano Group, Salvador Vitelli. “There are few wheels running in March, but the truth is there is nothing to project improvement throughout the month. The early March average is in line with what it was in the last days of February and, unless a measure appears that changes the scenario, this figure is not expected to increase,” the analyst said.

According to his calculations, for the month’s settlements to approach the average figure for the past 20 years, or about $84 million per day, the field would have to enter about $1,850 million over a total of 22 business days. “It’s totally unlikely, February was below $1 trillion, it’s hard for the trend to change sharply, it’s highly likely that we will see a very poor month of February in terms of oilseed export liquidation and of cereals”, anticipated Vitelli. .

These figures, in sum, are in line with forecasts that are getting worse every day regarding the impact of the drought. The agriculture sector of the Regional Consortia for Agricultural Experimentation (CREA) published a report last weekend in which it warns that between the water deficit and the early frosts, up to 20,000 million dollars of agricultural sector exports will be lost.

But this figure is not definitive. For the moment, CREA forecasts a total soybean harvest of 31.2 million tons, 38% less than the previous season, and a contribution in foreign currency from exports which will drop by 11,731 million dollars, as long as it does not will not continue to deteriorate the quality. crops, which cannot be ruled out given the prolonged heat wave.

On the maize side, the harvest projection is 38.6 million tonnes, 30% less than in the previous cycle, and a currency drop of 5,198 million USD. And in the case of wheat, the harvest calculated by the entity amounted to 12.1 million tons, which represents a decrease of 37% compared to last year, with a decrease in currency of 2,693 millions of dollars. It is this contraction that is reflected in the daily liquidation figures, which contrast with the record levels of last year.

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