So far, due to the drop in wheat yields and the impossibility of refertilizing the crop, it is estimated that the exportable balance would fall by more than 3 million tons, which represents a drop in income of just over US$500 million. This scenario would be perhaps the most benevolent so far, because the drop in production could be even worse in the short term. Rainfall was forecast for last weekend, which finally arrived in a scarce and diffuse way. That is why the next few days will be key to understanding how the panorama continues. The latest projections predict that the wheat harvest will be around 17.7 million tons, versus 23 million tons in the previous cycle.
The case of soy
Regarding soybeans, despite the fact that producers are currently selling strongly the grains they had in their silos thanks to the incentive imposed by the Government of a differential exchange rate of $200, the truth is that the concern is great. regarding the next campaign of the oilseed. This is not a minor figure at all because the Argentine economy largely depends on this crop and this year alone it would mean revenues of more than US$23,000 million.
The soybean campaign, that is, the sale of inputs for the next planting of the oilseed advances at a very slow pace, since the producers are still evaluating the steps to follow in a context of drought, estimating how much technology to use and what sowing window is the most convenient to avoid losing yields.
According to projections made by the consultant Néstor Roulet, as a result of the drought and economic uncertainty, in 2023 would enter US $ 3,300 million less than in the current cycle. In this account, the consultant adds the fall in wheat yields, the corn harvest and the few hectares that would be added by soybean planting.
This is the third year in a row that Argentina is going through the La Niña climate phenomenon, which means less rain in the core zone, and at the moment the projections are not encouraging at all because climatologists anticipate that the scenario could last at least during the first quarter next year, thus affecting soybeans and corn.
Finally, the price factor is another key to take into account in the medium term. During this 2022, the high values of commodities compensated to a certain extent the impact of the drought, but as of next year, or rather the next soybean campaign, the situation may not be the same and the impact on the income of dollars will be still older.
Source: Ambito
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