ARGENTINA-The Buenos Aires grains exchange has slashed its forecast for Argentina’s 2022/23 soybeans and corn production by up to 25% if drought in the South American country’s agricultural region continues.
The corn harvest for the 2022/23 season is now estimated at around 45 million tons, down from the 55 million tons previously forecasted, while the soybean harvest was slashed to 37 million tons, down from a previous forecast of 49 million tons as reported by Reuters.
Argentina is the world’s third-largest exporter of soybeans and corn and a key international supplier of wheat.
However, the country has continued to experience drought that began plaguing Argentina’s core agricultural regions in May last year and the situation is threatening output and pushing back planting.
“The absence of rainfall, depleted water reserves, rising maximum temperatures, and an increase in the atmospheric demand for humidity limit the growth of crops,” said the exchange.
If this trend continues, the harvest impact could reduce Argentina’s economic growth by 1.8% this year and potentially lead to a US$11.63 billion loss in grain exports, the exchange said.
The exchange is however hopeful since on Thursday last week, it had predicted that a storm front would over the next week bring “moderate to abundant” rainfall across most of Argentina’s agricultural area.
The declining harvest is also expected to hit wheat grain, one of the country’s key export commodities. The country is the primary South American producer and exporter of wheat, accounting for about 7% of the global export
However, the exchange has forecast the 2022/23 wheat cycle at a 12.4 million tonne harvest, down from the 22.4 million tonnes collected in the previous cycle.
Meanwhile, the US soybean and corn markets got a boost after the USDA confirmed private sales of 150,000 tonnes of U.S. corn to Colombia and 119,000 tonnes of soybeans to unknown destinations.