The entity pointed out that “it is imperative to advance with clear palliatives for the sector in the short term to prevent this situation from generating irreparable damage, and to work on a strategy to arrive at solutions that, in the future, generate incentives for more production. Convinced that we are part of the solution, the chain is always open to dialogue and we hope to be able to agree on urgent measures that reflect these needs,” the statement said.
The possible lack of quality grain for the soybean extruded industry is not a minor fact. Argentina is currently the leader in shipments of soybean oil and meal worldwide and has an industry that works with high idle capacity. During this year, the primarization of exports was evident, that is, more grain was exported to the detriment of value-added products, but this trend could change in 2023 since the return of the withholding differential promised greater profitability for oils.
Within this framework, drought is then presented as the great problem that not only the countryside but also the economy in general will have to cope with. Less production or poor quality grain will result in less dollar income. So far, the most optimistic analysts anticipate that the setback in the settlement of foreign exchange, due to soybeans alone, could be at least US$3,000 million.
Another key issue is that in the current context of drought, small and medium-sized producers are the most affected, since they do not have the financial capacity to quickly reverse the loss of yields or of the entire harvest in many cases.
The scenario that arises is one of more uncertainty than certainty. According to the latest report from the Rosario Stock Exchange, until last week there were 2.4 million hectares planted with soybeans that are in poor condition due to lack of rain. Meanwhile, some 400,000 hectares remain to be planted, which are still delayed due to the lack of moisture in the soil. At the country level, progress could only be made with 60% of the implementation estimated at 16.4 million hectares.
The truth is that the soybean chain is the largest contributor of foreign exchange in Argentina with around US$23,000 million a year, as calculated for this 2022. Although international prices continue to rise, given the alert that posed by the drought in Argentina, the situation for producers continues to be complex because in many cases the drop in production cannot be offset by high prices. The Government is following the issue with concern, while waiting for the long-awaited rainfall to arrive in the short term.
Source: Ambito
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