Mumbai, 24 March (Commoditiescontrol): Argentina's Buenos Aires grains exchange has maintained its production forecasts for soy and corn for the 2022/2023 season, despite the historic drought that has affected the country. The exchange held its soy estimate at 25 million tonnes and corn outlook at 36 million tonnes. However, it cautioned that further cuts were possible due to lower-than-expected yields on the first batches of soy, below historic lows and the initially expected returns. The exchange also warned that the forecast for corn could be further reduced if yields are below expectations.
The drought has significantly impacted the production of wheat, corn, and soy, with soy likely to have its worst harvest in over 20 years. However, rains in the central regions have put a brake on the deterioration of the crops. Over the next week, the north and centre of the Pampas region are expected to receive moderate to very abundant rainfall, which could improve the crop outlook.
Despite the challenges posed by the drought, Argentina remains the world's leading soybean oil and meal exporter and the third-largest corn exporter. However, the drought has accentuated the need for imports from Paraguay and Brazil. According to a report by the Rosario grains exchange released on Thursday, Argentina's soybean imports are expected to more than double this season.
The report predicts that Argentina will import 7.9 million tonnes of soybean this season, up 139% from the previous season, due to a harvest of just 27 million tonnes, a significant drop from the previous crop of 42.2 million tonnes. In addition to the high supply from Paraguay, Brazil has been emerging as a growing supplier of soybeans for the Argentine oil industry, with Argentine firms importing just over 400,000 tonnes of soybeans in the first two months of 2023, including about 170,000 tonnes from Brazil so far in March.
Argentina's corn exports were strong before the drought's impact on the 2021/22 harvest. The country exported $9.15 billion of corn from that harvest, its second-highest level, despite a 15% drop in volumes from the previous year. However, the impact of the drought on the current season's harvest remains to be seen.
Last week, the president of Argentina's grain processing chamber CIARA told Reuters the sector is in crisis and operating at the lowest capacity in history. In addition, the drought has put significant pressure on the country's agriculture industry. While the recent rains have provided some relief, the need for imports and the potential for further reductions in production forecasts remain concerning.
Argentina's agriculture industry is facing significant challenges due to the historic drought. The Buenos Aires grains exchange maintained its production forecasts for the 2022/2023 season, but further cuts are possible due to lower-than-expected yields on early harvested soy. As a result, the need for soybean imports is expected to double this season, with potential implications for Argentina's leading exporter status. The coming months will be crucial in determining the impact of the drought on Argentina's agriculture industry.
(By Commoditiescontrol Bureau: 09820130172)
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