Feb. 6 (Bloomberg) -- Argentine grain exporters and farmers agreed to deliver $2 billion to central bank reserves this month, Cabinet Chief Jorge Capitanich and a Grain Exporters Association official said today.
Exporters agreed to sell stockpiled soybean before harvest, the Grain Exporting official, who attended meetings with the government, said in a telephone interview from Buenos Aires. He asked not to be named to comply with internal policy. The soy harvest is scheduled to begin in late March.
The agreement was reached after meetings between the parties yesterday and today as the government led by President Cristina Fernandez de Kirchner was seeking to persuade farmers to sell their harvest to help replenish reserves. Argentina’s central bank funds plunged 35 percent in the past year to a seven-year low of $27.9 billion yesterday, according to preliminary central bank data.
“Grain exporting companies have committed to bring in $2 billion during February based on the stability of the exchange rate and their estimates of export flows,” Capitanich said in his Twitter account today.
Farmers were holding on to about $4 billion of soy, Economy Minister Axel Kicillof said in a Jan. 24 radio interview. Since devaluing the Argentine peso by 15 percent in the week ending Jan. 24, the currency has remained at about 8 pesos to one U.S. dollar.
Argentina, which depends on agriculture for about one-third of its export revenue, is hoping to get a record crop this year that will add as much as $29 billion to the reserves, up from $23 billion last year, according to estimates from the grain exporters’ association CIARA-CEC.
Locked out of international markets since its $95 billion default in 2001, Argentina depends on central bank funds to pay debt and finance government spending.
The grain exporters association is comprised of international distributors such as Cargill Inc., Bunge Ltd. and Louis Dreyfus Commodities BV as well as local producers including Cresud SACIF y A and El Tejar SA.
Soybean futures for March delivery rose 0.7 percent to close at $13.2575 a bushel on the Chicago Board of Trade, after earlier touching $13.345, the highest since Dec. 23.
--Editors: Robin Saponar, James Attwood