Amid the tension due to the increase in withholding taxes, good news comes from the agricultural sector for President Javier Milei.
After the disaster that the historic drought meant in the last 2022/23 campaign, The new crop is performing more encouragingly after the recent rains. According to a report from the Rosario Stock Exchange, a harvest of 137 million tons and an income of over 35 billion dollars is expected.
winter crops they were already influenced by negative climatic factors from the beginning of its cycle. According to the report, the lack of moisture in the soils at the time of planting limited the progress of the coverage.
LTotal wheat production amounts to 14.5 million tonnes, slightly below what was initially expected in a business as usual scenario. However, The growth in production from one campaign to the next is almost 25%. As regards barley, it is estimated that production could reach 4.9 million tonnes, an increase of over 35% compared to the volume obtained in the previous season.
As for summer crops, the prospect is favorable, explained the Rosario Stock Exchange. Although a moderate to strong El Niño event had been forecast for this summer since mid-year, the rains took a little longer than expected to arrive, but they finally arrived and allowed much of the water in the profiles to recompose. Therefore, given the estimates of the implanted surface of the main grains, Early projections place soybean production at 50 million tons and corn production at 56 million tons. Sunflower is estimated at 4.3 million tonnes and sorghum at 2.4 million tonnes, while other crops would add another 4.9 million tonnes.
Therefore, the total cereal production in 2023/24 could reach 137 million tonnes65% more than the total volume obtained in the previous campaign and would be the second largest production in history, behind only the 140 million tonnes of the 2018/19 cycle.
Exchange
The strong recovery in production expected for the new campaign allows agriculture to once again position itself as a key contributor of real foreign exchange to the country’s economy. According to a report by the Agricultural Foundation for the Development of Argentina (FADA), the campaign generates 7 out of 10 dollars entering the country, or represents 70% of exports.
Based on these production numbers, Rosario entity predicts agriculture will export nearly 100 million tonnes in 2023/2465% more than the total estimated to be exported in the current cycle.
Broken down by production, overseas shipments of grains and oilseeds would amount to 63 million tons, with corn positioned as the main export cereal (40 million tons). However, it is worth remembering that there is also a strong recovery in the export of other cereals, with wheat leading the way with 9.5 million tonnes, triple what was achieved in 2022/23.
As regards shipments of by-products and oils abroad, an increase in shipments in terms of tonnes is also expected for 2023/24, with ctherefore 30 million tonnes of by-product exports and 6.7 million tonnes of oils, in both cases an increase of 45%.
In this way, given the notable recovery in foreign shipments of the main agricultural and agro-industrial products in terms of volume and according to the export prices expected for the next cycle, The sector’s contribution in terms of foreign exchange from exports would amount to $35.8 billionmore than 10,000 million dollars more than the total contributions made in the current campaign.
Among the main complexes Soybeans would once again emerge as the major export complex, with over $20,000 million generated by shipments of grains and derivatives (up from $13.7 billion in 2022/23); but the strong recovery of corn also stands out, with a contribution of 8.3 billion dollars. The grain complex, meanwhile, would generate shipments of $2.4 billion, double the threshold reached in the last campaign.
Anyway, Most of the foreign exchange earnings will occur from April to Maywhen the soybean and corn harvest begins.
This occurs in the middle ofto the tensions that led to the increase in withholding taxes to 15% of the total production in the field. Last Monday, the Minister of Agriculture, Fernando Villalla, announced that 18 regional economies will be exempt from the rate increase. They are: olive growing, rice, cattle hides, dairy products, fruit (excluding lemon), vegetables, beans, potatoes, garlic, chickpeas, lentils, peas, honey, sugar, yerba mate, tea, horses and wool. For the wine sector however it will be 8%. But soybean byproducts increased from 31% to 33%.
Finally, the production recovery does not only have effects on the external front, generating a real foreign exchange for the country, but also has repercussions on the national economy: the Gross Added Value of cereal production in the new campaign triples compared to the value of 2022. /23 cycle, reaching more than 15,000 million dollars.
Source: Clarin
