How did the Central Bank end the month?
Reserves are located at US$ 42,005 million, we have fewer and fewer reserves, there is no genuine foreign exchange income and monetary liabilities tend to grow.
Why are so many dollars leaving?
There are different reasons, the balance of tourism is growing, we estimate for the whole year a deficit of US$5,000 million, and card spending abroad could be US$3,000 million, that’s US$8,000 million in two items. To this you have to add that between payment of loans, interest and dividends we will migrate abroad some US$10,000 million. In minimum external capital formation we will have an outflow of US$800 million.
How much does it add?
About US$18.8 billion.
The balance of trade?
In the first 3 months of the year, the difference between what was collected and paid on the trade balance was US$ 3,859 million, it is an important figure, we should maintain this level of income in all quarters to get closer to US$ 16,000 million .
we would go backwards
Correct, but we are estimating an income from Foreign Direct Investment of about US$1,000 million, that would temper the problem.
We are still in red
It would be necessary to obtain the resilience fund from the IMF, those US$ 1,300 million that they would contribute from above will be key.
we are still fair
Undoubtedly, this year there will be import restrictions, as well as some restrictive measure for those who travel abroad. This exchange rate is still travel friendly.
The government does not want to devalue
In the month of April, the exchange rate rose 3.9%, against inflation that would be around 6.0% per month, clearly we once again have a backward exchange rate.
The exchange balance by sectors, which is giving us.
There are some winners and many losers.
Let’s start with the winners
We are going to show the balance between exports and imports of each sector, first the only 5 winners out of 28 sectors
How could we do to export more?
For example, lowering withholdings, freeing meat exports, de-anchoring domestic prices from international ones, that does a lot of damage to exports.
Less intervention?
Correct, Argentine foreign trade must be freed.
What happens to the deficit sectors?
Out of 23 deficit sectors, I will show you the five most important
What can you tell me about these numbers?
If we look at the winning sectors, everything suggests that the trend for the quarter will exceed the annual evolution. However, in the deficit sectors, the trend for the quarter indicates that we are going to have fewer imports in the year. This fully shows that they are restricting imports, the sector in which it is most clearly noticeable is Automotive with an annual deficit balance of US$ 3,159 million, and in the quarter it has a negative balance of US$ 500 million, clearly there are very severe. Used cars will continue to be highly valued in the market, since we will hardly have a great offer of zero kilometers.
What is your conclusion on the dollar issue
Let’s break down the analysis
- There are no reserves, and I do not see the possibility of many dollars coming in from abroad to strengthen them, beyond disbursements from the IMF or the US$1.3 billion that would come from the resilience fund.
- At the current rate, I see a more severe closure of imports, since the balance of the trade balance should be much higher than the current projection.
- A restriction is coming to travel abroad, the balance of the tourism balance will be very negative this year, and a government of these characteristics will seek to limit travel in some way.
- The current exchange rate is very low, and it will continue to be low since the government’s policy is not to increase it so as not to generate more price increases.
- Alternative dollars will be at very high prices by the end of the year.
- The tentative exchange rate values will be disclosed through the private report.
How do you see the field?
Without wanting to sell soybeans and corn, of the entire 2022/23 campaign to harvest soybeans and corn, only 13% of the soybean campaign and 32% of the corn campaign have been sold with a price, there are many dollars in the field and the sale will come very slowly. More information on the raw material price map in the private report.
What happens to the wheat?
The government asked the exporters for help, and they wrote down 8 million tons of wheat, which implies that they advanced the withholdings that the government should collect in 2023 to the month of April. Something similar is being studied with Corn. This government is working to advance the retentions of the year 2023, this speaks clearly that they are in a serious problem. Anytime they sell 2024 wheat, they’re penniless.
What business do you see with soybeans?
Get in the DeLorean from Back to the Future, the car that takes you to the future or the past and do business.
Can you explain it to me better?
Of course
- Soybeans available $50,300
- Soybeans July $58,806
- September soybeans $64,930
- November soybeans $70,640
Where do you get these values in pesos?
I sell the future soybean and the future dollar, in this way I have these values. When I have this sale made, I write a check and discount it at the market. If I don’t want to write the check to discount it, I can pay some debt I have for the future, and I’m closing a good price.
This operation is with the Matba Rofex
Correct
If soy or the dollar rises I have to replace guarantees
Correct
I do not like it that much
I have the solution, I can’t give names because the boss has forbidden me, but there are cooperatives that do the operation for you and they take care of replenishing guarantees. Question, Turris are not usually made (it’s a hint).
How’s the week?
On May 3 and 4 you have the meeting of the Federal Reserve, I would tell you to prepare for a 0.75% rise in the short-term rate, inflation is on fire in the United States, this affects the emerging world. The dollar went too far with the strength, note that the euro is worth 1.05 per dollar, when it was born in 2002 it was worth one to one with the dollar, you have to look more fondly at the euro, below 1.00 you have to buy and save. You have to start looking at it carefully.
In Argentina on Monday we will know the tax collection, which comes with the anabolic effects of the advanced retentions of the 2023 wheat, we believe that it will come with an interesting rise. On Thursday comes the Industrial Production Index for March, stay tuned with this indicator. On Tuesday we will have in the private report all the financial data for March, and we will draw projections of what is coming in terms of rates and the exchange rate.
Where are you this week?
In Carcarañá on Thursday to speak at Connect, in the afternoon by zoom with Acara, and on Friday in the town of Suipacha Buenos Aires.
–
