Positive effect after the lifting of the exchange rate restrictions: the agricultural sector liquidated more than $3 billion in May

The Argentine agricultural sector recorded foreign currency inflows of more than US$3 billion in May, representing a 21% increase over the previous month. This figure, reported by CIARA and CEC, consolidates a growth trend in agroindustrial foreign trade and reflects the positive effects of the partial lifting of the exchange rate restrictions and the progress of the coarse grain harvest.

"This result is due to a faster pace of sales and the impact of more competitive conditions following the change in the exchange rate regime," explained the entities that represent the main exporters of grains and derivatives. Compared to May of last year, growth was 17%, while the annualized growth already shows a 29% improvement compared to January-May 2024.

The rebound is also supported by the reduction in export duties established by Decree 38/25, which, according to Economy Minister Luis Caputo, will remain in effect after June 30 for most products, although it will not yet extend to crops such as soybeans, corn, or sunflowers. "The total elimination of withholdings could not occur until within a year," Caputo clarified, adding: "We would need financing to sustain the reduction without jeopardizing the fiscal balance."

CIARA-CEC emphasized that foreign currency earnings are directly linked to the purchase of grains destined for export. "This flow of dollars is essential to sustain purchases from producers and boost the domestic market," they stated. They also noted that settlements often occur before physical sales: in some cases, up to 90 days before.

The dollar's performance was also under scrutiny during the month. Despite the inflow of foreign currency from the agricultural sector, the wholesale exchange rate closed May with a 2.3% rise, remaining in the middle of the exchange rate range.

Even so, the agricultural data was welcomed by the government, which seeks to consolidate a model of managed floating of the exchange rate without sacrificing the trade surplus. Foreign currency earnings from the agroindustrial sector represent almost half of Argentina's exports, and their recovery is seen as a key pillar for sustaining economic stability.