The field is experiencing a hard time. According to the latest report of the Rosario Stock Exchange, the cost of the drought It has already amounted to US$14.140 million just by focusing on soybean, wheat and corn crops, which are responsible for 87% of grain production in Argentina and 43% of the country’s total exports.
If we add to this the impact of lower demand for freight, labor, financial services, among others, the total losses for national economic activity amount to US$19,000 million. In other words, The drought has already claimed 3 points of the Argentine GDP estimated for the year 2023.
Regarding the net exports of the wheat, soybean and corn complexes, that is, including shipments of oils, flour, biodiesel, and other products obtained from the processing of grains, the projection of foreign exchange income for the 2022/23 campaign falls to u$s21,740 million, u$s13,950 million below the previous 2021/22 campaign yu$s14,240 million behind what was projected at the time of planting, in September 2022.
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Impact on collection
Finally, as a consequence of the retraction in Argentine exports of grains and by-products, it is expected that the impact on the collection of export duties results in a drop of more than US$2,314 million compared to what was expected at the time of planting, while another US$3,742 million would be lost in other taxes, including profits. In this way, the drought would have eroded the tax revenue estimated for the campaign by a total of US$6,056 million.
The 3 direct impacts of the drought
– Productive losses: Between what was projected at the time of sowing and the estimates to date, 50 million tons of production were lost, only in wheat, soybeans and corn. In dollars, the losses of the production sector amount to u$s14,140 million. This is equivalent to the total cost of planting the next 2023/24 harvest for the agricultural producer.
None of the 3 main crops in Argentina managed to overcome the inclement weather and production estimates are cut today to 11.5 Mt for wheat, 27 Mt in soybeans, and 35 Mt for corn.
– Global losses for the national economy: The 6.4 million hectares that will not be harvested, as well as the 49.5 million tons of wheat, soybeans and corn that will not be able to be produced due to the drought, have an impact on lower purchases of inputs, contracting of labor, freight, services intermediation and financial services, among others. At the national level, the global impact of the drought on all economic activities amounts to US$19,250 million, or 3 points of the GDP that was projected for 2023.
Direct negative economic impacts
to. Increase in fodder costs for cattle and meat chains
b. Less activity in transport
c. Less consumption of Gas-Oil in the automotive transport of loads
d. Probable lower sales of inputs in the next campaigns
and. Lower income in the sector of storage and conditioning service providers
F. Lower gross income of rural contractors when harvesting due to drops in yields
g. Less activity in the oilseed industrial complex
h. Lower income for service providers associated with exported merchandise
to. Fall in income received by port service providers and/or on vessels
j. Problems in compliance with field lease contracts
k. Problems in the fulfillment of the payments of the financial system and problems for refinancing of debts. Need for greater financial leverage in the next campaign
3. Fall in the value of agro-industrial exports: Net exports of the soybean, corn and wheat complexes are projected for US$21.740 million, that is, US$14.240 million. Less than estimated at planting time (↓40%). These three items represent, on average, 43% of Argentine exports.
Source: Ambito
