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Argentine Soybean Sales Drop 45% in June Due to Currency Discrepancy

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Argentine soybean sales fell by 45% in June compared to the previous month, totaling approximately 3.8 million tons. This decline is attributed to the widening gap between the official and informal peso exchange rates, according to the head of the CIARA-CEC, a chamber representing grain exporters and processors.


Argentina, a leading global exporter of soybean oil and meal, experienced delays in selling the 2023/24 soybean crop, which concluded harvesting last week. These delays were due to various factors, including excessive rainfall in April.


"The farmers' sales in June significantly decreased compared to May. We will be around 3.8 million tons in June, a drop of nearly 45% from May," stated Gustavo Idígoras, president of CIARA-CEC, to Reuters on Thursday night.


"When the discrepancies between the official dollar and financial dollars and the parallel (informal) dollar begin to grow, it slows down and almost paralyzes the grain trade market in Argentina. This is natural," Idígoras explained.


Currently, there is a 45% discrepancy between the official peso value, at 912 pesos per dollar, and the informal rate, around 1,320 pesos per dollar. This gap was between 15% and 20% in May, according to Reuters data.


In Argentina, export dollars are converted into pesos, so farmers closely monitor exchange rate developments.


Idígoras also noted that many producers sold soybeans in May to cover expenses for planting the 2024/25 wheat crop, which began in Argentina at the end of last month.


The CIARA-CEC president added that the volume of 2023/24 soybeans crushed in Argentina in June would be very similar to that in April, which was 3.8 million tons according to chamber data.


Therefore, with the addition of 15.2 million tons of soybeans processed in the first five months of the year, as per official data, the total soybean crushed in Argentina in the first half of the year would be 19 million tons, below the 10-year average of 19.6 million tons for the period.

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