The elimination of the exchange gap would generate more profits for wheat, corn and sunflower producersthan the improvement that would be perceived by an elimination of export duties, according to a study by the Grain Exchange.
The report clarifies that the two situations are “strongly distorting and cause great damage to production, exports, investment and growth.”
The study that analyzes which of these two measures is more distortive on production, indicates that in all cases they took into account that producer prices are settled according to the official exchange rate, but it is evaluated gross margin to dollar MEP.
To assess the effects of reducing the exchange rate gap and export duties, the analysis proposes scenarios in which both variables are reduced in different proportions: 25%, 50%, 75% and 100%.
According to the study, “in the central scenario (50% pass-through), the elimination of the exchange rate gap generates a greater increase in the margins received by wheat, corn and sunflower producers than the improvement they would perceive given an elimination of export duties.
«In the case of soybeans, the effect between both policies is similar, with a slight preference towards lowering export duties, although the difference is not significant, because export duties for cereals and sunflower are lower than in the case of soybeans”, explains the analysis of the Cereals Market.
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