Argentina relaxed currency controls, but agricultural sales have been slow to respond.

On April 14, Argentina's grain industry welcomed a long-awaited currency reform. The Argentine Central Bank announced last Friday evening the relaxation of foreign exchange controls, allowing the peso to float freely within a range of 1000 to 1400 pesos per US dollar. This policy is synchronized with billions of dollars of aid about to be provided by institutions such as the International Broker Detectorry Fund (IMF). It aims to accelerate the sale of agricultural products and boost foreign exchange inflows, as agriculture has been a primary source of Argentina's foreign exchange earnings.

However, despite the implementation of this policy, experts point out that due to delays in the harvesting progress, especially with soybean harvesting affected by heavy rains, the sales growth effect brought by the reform may not be immediately apparent. Farmers and exporters are currently more focused on the progress of the harvest rather than changes in the exchange rate, which may lead to continued sluggish sales of soybeans and corn this week. The shortened Easter holiday further reduced trading time, and exporters remain cautious about the stability of the peso's exchange rate.

On Monday, Argentine President Javier Milei urged farmers to speed up their sales pace, emphasizing, "If farmers need to sell grain, now is the best time." Argentina currently imposes a 26% tax on soybean exports, while soybean oil and soybean meal are taxed at 24.5%. Milei also stated that the temporary tax reduction policy, originally set to expire at the end of June, will not be extended.

Although currency reform supports the normalization of Argentina's foreign exchange market, due to the delay in harvesting progress, industry insiders remain cautious about market reactions. Data from the Ministry of Agriculture shows that as of April 2, Argentina's grain sales have fallen to their lowest level in nearly a decade, indicating that market recovery may still take time.

Currently, Argentine farmers are concentrating on soybean harvesting, although weather conditions remain unstable, delaying field clearing work. As the weather gradually improves, farmers hope to complete the harvest quickly to avoid further impact on yields.

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