Hardly the actors of The Argentine economy will once again forget what happened in 2023. And this time not due to twists of political destiny or endless bad economic policies, an old Argentine tradition. What happened was that this time climatic chance determined that a drought would occur to crown three years of inclement weather under the umbrella of the current.tea of La Niña that eroded agricultural production and ended with a record drought for vast areas of the core zone. Conclusion: a reduction estimated by economist Esteban Domecq, president of Invecq, of up to US$22,000 million compared to the exportable balances of 2022.
This also puts on the table an elusive issue when thinking strategically about Argentine development: if the role of the entire productive chain of the agricultural sector is so decisive for the rest of the economy, what requirements must police decisions meet? economical. That a bad year ends up mortgaging the rest of the country implies that there are no fuses in the rest of the variables. Something that a good year can make you lose sight of but that should not be forgotten.
Perspectives. The projections for next year are based, first of all, on the hopes that the next campaign can recover its usual volume. Without being an irrational optimist, everything indicates that it will never be worse or the same. For example, the lack of humidity conspired for the sowing of wheat and sunflower, which will bring a lower production than the historical average in many locations. It could also play against the fall in international prices: US$495 for soybeans in Chicago, 15% from six months ago, so, even recovering the historical planted area, the record of 202 could not be reached.2. In Rosario, meanwhile, the same ton was priced at $181,000 (US$210 at CCL value), revealing the other burdens that afflict production: the exchange gap and withholdings.
The prospects for the agricultural sector are key. In it AgBarometera survey that measures the confidence of producers and is carried out by the Agribusiness Center of the Austral University In Rosario, there is a jump in long-term expectations – more than a year – but much more moderate in the short term. Roman Dante, professor and researcher at the institute, explains that every two months about 200 producers are surveyed, stratified, and distributed in areas and activities in proportions similar to that of the census, they are asked questions and with the answers an index is built, with a base of 100 (indifference), more than 100 (optimism) and less (pessimism). “Future conditions refer to more than a year, and there we notice a notable positive change in mood, in contrast to a complex situation for much of this year. It is clearly marking a change of mood on the producer’s side that I believe fundamentally has to do with the expectation of a better gross harvest,” he points out.
Future. The specialist Marcelo Elizondodirector of the consulting firm IDrisks that total exports will climb to US$85 billion in 2024, leaving an exportable balance of US$10 billion. “It is very difficult to make an exact forecast because there are still many variables that can change, in addition to the climate, a volatile international scenario and other local ones., such as the definitions of economic policy: exchange rate, trade openness and indebtedness”, he emphasizes. In this regard, he highlights that the average prices of all Argentine exports They are 12% below those of 2022. It also indicates another unknown that was growing: the trade balance of services, which usually “ate up” the surplus of goods, also with strong delays in the payment of royalties and dividends caused by the shortage of foreign currency.
About, Sebastian Menescaldiassociate director of Eco Go Consultants affirm that they estimate a surplus of US$14,700 million between the recomposition of agriculture (+US$4,000 million), the improvement of other exports (+US$6,000 million) among which energy stands out (+US$4,000 million) and the decrease in imports (-US$12,000 million). “Without access to external public credit, private commercial debt capped and with little chance of promoting foreign direct investment (FDI), the only way to generate enough dollars considering the rise in exports and debt maturities in 2024“It will mean lowering imports that will probably drop from the current level that is exceeded by the gap and accumulation of stocks by companies as a hedge,” he warns.
Precisely, the other issue that could affect next year’s trade balance number is the carryover of a debt that will end up affecting next year’s imports. The Economist Salvador Vitelli, Head of Research Roman Group, It projects that by the end of the year defaults will have accumulated with parent companies and other importers for US$54,000 million due to the different commercial and financial “traps” that transferred the burden of borrowing to the private sector given the inability of the national State to do so. The exception was what was obtained in yuan that was used to pay the IMF the last installment or to finance imports from our main commercial client, China. That is to say, obtaining foreign currency would be subject to negotiation with each creditor, which, again, may be scarce even with other perspectives of the economy.
Finally, all these movements will have to be harmonized with an exchange rate that remains an unknown. They gave a supplement to the official dollar of $350 with the permission to settle up to 30% of each export through the financial market (CCL), which in fact produced an improvement of 40%. An alternative after the ballot and with a positive result for the minister, is to change said “mix” until reaching a value that has at least reflected this year’s inflation. A step prior to the formal splitting of the exchange market with the objective of unifying it later.
In short, a puzzle to put together that will surely be at the center of the scene in the transition between this mandate and the next because it will condition all the economic policy that is to be implemented next year and this, in turn, will also affect a endless round trip with the external balance. That is, as long as no other “black swan” appears on the international stage and the climate, at least, does not put the brakes on the wheel again..
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