Guilherme Palhares: Good morning, everyone. Thanks for taking my question. I would like to explore a bit on the farming side, right? We are finally moving away from El Nino and maybe going into a season that might look a bit better in terms of primary conditions. So a question that we have around that is regarding yields for the next year, right? Because we had three years of El Nino conceptually and we would like to have a bit of a sense whether you see yields normalizing already in the next harvest season or whether the depletion of the soil through three consecutive droughts could have an impact that would be long standing in terms of productivity for the coming season. So that’s question in terms of farming. And another one, in terms of dairy, we are seeing that the company is already beating its initial estimates in terms of the herd that you are managing, you see that herd continues to grow and whether you’re reaching a new goal in terms operational just the sheer size of the operation of dairy, whether you see herd continue to grow or we are stabilizing on that level?
Thank you.
Mariano Bosch: Guilherme, thank you for your question. Number one, regarding the El Nino forecast and the yields expected for next season in crops, it’s very clear that there is no effect on the past drought. So we are starting from scratch the new season. So we can expect normal yields going forward. Furthermore with El Nino, we should expect above normal yields, but we are only using as a budget, the normal yields for the five years — the last five years average. That is regarding crops in general. Then to your specific question on dairy, in the dairy cows, we are achieving and even going beyond the productivity levels, but this is within the same cow herd. We are not planning to increase our cow herd for now. We are simply increasing its productivity unit per cow basis.
This increase in productivity also has to be taken into account a new biomethane production that will start to produce by the end of this year, so that will also increase our sales through the sales of electricity generated by the biodigestor. So those are the increases that will happen in the dairy business. On top of this, also in the dairy business, we should see improvement through this investment that we’ve done in the cheese factory that will also increase our total sales. But in terms of the cow productivity, it’s only this increase in productivity per cow basis. Furthermore, there are some value-added products in the domestic markets that we are also improving or achieving the market, and that will also generate some additional profits on the daily business.
Guilherme Palhares: Thank you, Mariano. That’s very clear.
Operator: Next question is from Lucas Ferreira from JPMorgan. Your microphone is open.
Lucas Ferreira: Hi, everyone. Good morning. Thanks for taking my questions. I have a few on Argentina. The first one on the rice business. You mentioned that India ban on exports, was checking some important Asian markets, you see already rice prices increasing 30%, 50%, depends on the index you look. So my question is on the rice business, when you look at the marginal price you’re selling, exporting right now, how much bigger this is versus the, let’s say, the prices — the realized prices in the second quarter. So just — we have a sense of sort of the size of the potential upside you could see in the third or the fourth quarters in the rice business. The other question is more about Argentina macro. So if you can remind us, given the recent devaluation.
Your net exposure to the currency, I mean, you obviously sell some local, but mostly exports, but you have also the inputs that you still need to buy. So just wondering the net effect that you would expect on the devaluation. And you mentioned the preferential rates, FX rates. So if that continues in this scenario. Just wondering what to expect now with this new FX levels in your business? Thank you.
Mariano Bosch: Lucas, thank you for your question. Regarding rice, as we explained in our presentation, we are very optimistic. We see this advantage. We see that we are very well prepared from South America, from Argentina and Uruguay with this large operation that we have and the investment we did last year in getting into Uruguay. We are very well positioned to supply the world’s market and these needs that the world has today. So how much this increase could be. We are increasing compared to the last year in relevant value in terms of prices. Regarding the last particular increase in the Asian prices because of the ban of India, there is also an increase for next year, and we feel more comfortable there, and we continue to benefit from that specific situation.
But it is more important than that because we are developing this specific varieties to specific clients all over the world. And that is giving us an advantage on top of the long grain rice that is the more commodity in the rice commercial business. So that is regarding rice. And then regarding the market of Argentina and this recent devaluation. Just to remind you, from Argentina, we export 70% or between 70% to 75% and 30% to 25% on the domestic market. So the devaluation in general is positive for our margins. It depends on when and how this devaluation happens is more or less positive. We are well positioned to take advantage of this specific measure. Furthermore, we anticipated some acquisitions of inputs for this campaign that we are planting now and that I mentioned we were optimistic and there, we also took some advantage of how this fertilizers and chemicals already acquired and in our balance sheet that are dollar-denominated cost within the total production.
So I would say this is very positive for us in terms of our future results.
Lucas Ferreira: Excellent. Thank you very much.
