As of today, the national production projection for 2022/23 of wheat is between 12 and 13 million tons, but it is estimated that millions of tons were left on the way due to inclement weather. What is happening with wheat is a productive disaster that will be discussed from now until the end of the year. Gustavo Idígoras, head of the Chamber of the Oil Industry and the Cereal Exporters Center (CIARA-CEC), assured that in the case of wheat “so far we have lost 9 million tons due to the drought. We are in a climatic calamity and this is going to affect us all.”
That “everyone” involves exporters, millers, producers and other actors in the commercial chain but, according to Idígoras, the concern of those who have signed commitments with foreign buyers and do not know if they will be able to fulfill the contracts is notorious.
It is worth remembering that in order to avoid an escalation in the price of cereal as a result of a reduced offer, the Ministry of Agriculture allowed shipments to be rescheduled (not suspended) without penalties for one yearbut the result of these negotiations will be known later since they will arise from the dialogue between local exporters and buyers from different parts of the world and from the progress of the harvest in our country.
Regarding the data and cereal stocks, last campaign left wheat available for 22.5 million tons: of that total, exporters bought 18 million tons and mills another 4.5 million to industrialize. This is how we get to this day and although it seems that there will be a lack of wheat because everything that could be sold has already been marketed, when the magnifying glass is placed on the sales of exporters, it emerges that only 15 of the 18 million tons were sent abroad. and therefore there would be 3 million tons of grain in the hands of different holders.
Regardless of who owns those 3 million tons of wheat, with that figure a link could be achieved with the new campaign, which will begin at the end of the year in the most productive areas since the drought hit hard the first wheats that arrive from the North.
As for the 2022/23 campaign, the Government – pressed by the lack of dollars – allowed between March and April of this year to record exports of 8.8 million tons of wheat that had not even been sown at that time and on which months later the ferocious drought that we suffer today would fall. If the almost 7 million tons required for the domestic market are added to the 8.8 million tons, the numbers do not close because the campaign with a lot of wind in our favor will leave us with 13 million tons of wheat. What is surprising about these numbers is that, of the 8.8 million tons, only 5.4 million tons were purchased. According to various market analysts, it is likely and quite understandable that exporters have made sales to secure a quota to export in a context of constant changes in the rules of the game by the Government, where the possibility of limiting exports or intervening in the market. For now, it remains to wait for a good production to be confirmed in the south of the province of Buenos Aires so that the wheat estimates do not continue to fall. But we will also have to wait for the “fine print” of the resolution that extends wheat shipments abroad and the obligation for producers to comply with grain delivery contracts, since for now no one knows what the commercial conditions will be like for the next year’s campaign.