BUENOS AIRES (Reuters) – Argentine soy farmers who maintain onto inventory of greater than 5% of their manufacturing will face an elevated financing value above the conventional benchmark price, the South American nation’s central financial institution mentioned on Thursday, a part of a wider push to encourage gross sales.
The central financial institution mentioned soy farmers over a sure measurement who hoarded their inventory would face a minimal financing price “equal to 120% of the most recent Financial Coverage price.”
Argentina’s benchmark rate of interest stands at 69.5%.
Thursday’s announcement goals “to make credit score costlier in order that it’s extra handy to promote (soybeans) than to take credit score,” a supply acquainted with the matter defined.
The supply added that now “the speed of any line of credit score goes to be costlier” for soybean producers, whose minimal price would begin at 83.4% below the brand new coverage, the supply mentioned.
The transfer comes as a part of an effort by authorities to replenish dwindling overseas foreign money reserves by pressuring soybean farmers to export extra.
On Sunday, Financial system Minister Sergio Massa set a preferential alternate price for soybean producers, sending soybean exports surging earlier this week.
Argentina is the world’s high exporter of processed soy oil and soymeal and the No. 3 for uncooked soybeans, however farmers have been holding onto inventory as a hedge in opposition to inflation and potential devaluation of the native peso foreign money.
Reporting by Maximilian Heath; Writing by Adam Jourdan and Brendan O’Boyle; enhancing by Richard Pullin
