The drought devastated grain production and the first shocks began which had a full impact on the Central Bank’s reserves: almost 6,000 million dollars less in currency in the first quarter and it is estimated that in 2023 losses will exceed 18,000 million of dollars.
Agri-export firms reported that they entered US$2,416 million (US$1,605 million of the agricultural dollar) in April. This is a 96% increase from last March, according to data from the Chamber of the Oil Industry and Grain Exporters Center (Ciara-CEC). But if you compare it to the same month of 2022, when $3,171.7 million was in, there is a 24% drop.
And so far this year, from January to April, theAccumulated settlements reached US$5,218 million against US$ 11,097.8 million in the same cycle, which marks a decrease of 53% (US$ 5,879 million).
“It was highly anticipated due to the very poor grain harvest, due to the delay in sowing the coarse harvest and what comes from the harvest, it was very lean. And on the other hand, there are lower price levels than in the first half year last year, which have been driven since February 2022 by the Russian invasion of Ukraine,” said David Miazzo, an economist at the Fundación Agropecuaria para el Desarrollo de Argentina (FADA).
The drought has reduced wheat production, earlier, to 11.5 million tons, half of what was harvested in the 2021-22 cycle. And now it has impacted soybean production, which is estimated to harvest 23 million tons, 45% less than it achieved the previous season, and corn, which is expected to harvest 32 million tons, 37% less than what was achieved in the previous cycle.
In this way, among the three main crops produced in Argentina, the total production of wheat amounts to about 66.5 million tons, with a decrease of almost 45% between campaigns. This is equivalent to nothing less than 50 million tons.
According to Ciara in her latest report, The main agro-export sector affected by the drought was the soybean processing industry. In the first quarter of 2023, oilseed crushing decreased by 2,547 million tonnes compared to 2022 and was down by 3,927 million tonnes compared to 2021, the worst crushing record in 20 years for the period.
And they calculate that by 2023 it will be at 27 million tonnes, which represents a drop of 11 million tonnes (30%) from 2022 when it reached 38.459 million. AS, Processed soybean volume estimated for 2023 by the cluster that generates the most foreign exchange for Argentina becomes the lowest in 18 years.
So in this context, the decline in foreign exchange gains calculated by Ciara is US$18,777 million.
The drought will also affect truckers. Just 161,159 units arrived year-to-date through March, 68% less than the same period a year earlier and 25% less than the previous low of 2014. And he expects 2023 to be on track to close the year with a Cumulative of just 808,000 trucks of wheat, corn and soybeans arriving at region’s ports and plants, 60% fewer than in 2022 and compared to the average of the last decade.
Tonnes of soybeans traded in terms of new contracts and fixes totaled 2,332,150 tons, falling 78% and 44% respectively below what they recorded during the first three weeks of 1 and 2 dollar soybeans. $1,667 million has been cleared so far.
Charles Arterburn is a seasoned business journalist for News Rebeat, where he provides comprehensive coverage of the latest trends and developments in the world of finance and economics.