Argentina’s 2022-23 production and export revenue to fall

Drought impacts major agriculture production areas

Argentina’s main agricultural growing areas have been the most affected by the country’s drought, resulting in substantial production declines, potentially leading to 23% fewer export dollars for the current campaign, the Buenos Aires grains exchange said in a report on Tuesday, February 14.

Production outlook

A total of 900,000 hectares of soybeans and corn were not planted in the current 2022-23 season due to the lack of water reserves and surface humidity.

Much of the planted area has reflected the negative crop conditions due to high temperatures and the absence of rain, with early corn planting and second soybean sowing being the most affected.

Rainfall during the last half of January aided the deterioration of crops, but up to 40% of crop loss is projected for early sowings in the most affected regions.

For wheat, the projected yield is 22.8 quintals per hectare, 34% lower than a year earlier and the lowest since 2008-09, which would result in a decrease of about a 45% production decline from 2021-22.

The estimated soybean area is listed at 16.2 million hectares, with production projected at 38 million tonnes, down 12% year-on-year.

Corn’s estimated area is noted at 7.1 million hectares, with production projected at 44.5 million tonnes, down 14% from the previous season.

The corn production estimates have been reduced by 5.5 million tonnes, compared to the initial forecasts.

Exports outlook

Wheat exports are estimated to fall by 55% compared to last season, which implies $3 billion less year-on-year.

For corn, a 21% reduction in exports is expected, resulting in a $2.16 billion decline.

The lower soybean production reduces exports by an estimated $4.5 billion, or 18%.

Thus, a total reduction in exports of almost $10 billion is calculated, a 23% decline from 2021-22.

The drought impact could be even greater if rainfall does not return to normal in the remainder of the campaign and the risk of early frosts becomes real, given the delays in planting progress, warned the report.

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