Friday, January 27, 2023

ARGENTINA | 17-01-2019 18:30

Devastating floods to shave up to US$2 billion off GDP

Heavy rains could keep coming for weeks, with thousands having already been displaced by devastating flooding.

High rainfall in the northeast of Argentina has caused devastating floods, amplifying the economic burdens facing the nation. About 3,500 people have evacuated the region, and millions of hectares of crops have been sent underwater, with experts forecasting the costs could hit the economy by as much as US$2 billion.

The flooded region, which extends into Paraguay, Uruguay and Brazil, has received about five times more rain than expected since the beginning of the year. Some areas received a whole year’s worth of rainfall in the first 15 days of the calendar year.

Damages to farmland ring in around US$2 billion, according Coninagro, an Intercooperative Agricultural Confederation based in Buenos Aires. The group reported that 2.4 million hectares of soybeans are flooded.

The greatest losses come from the Pampa Húmeda region, one of the main food producers in the world. Other crops like corn and cotton, along with livestock have been wiped out across the Northeast.

Agricultural strain

Just last year, Argentina was plagued with severe drought, the worst that had hit the country in half a century. This drought crushed the country’s agricultural sector and strained the country’s economy.

Heavy rains can waterlog growing crops or interfere with key sowing and re-seeing processes, Coningrado said. And in provinces like Corrientes, where water is nearly two metres deep, herds of cattle and other livestock can be displaced.

"Machines and tractors can even get stuck out on flooded farmland," Coninagro said.

Many have lost their homes and possessions to the floods, as about 3,500 people have been forced to evacuate. 2,930 people were evacuated from the province of Chaco, 600 evacuated from Corrientes, and 600 left Colon and Concordia, according to state-run news agency Télam.

"It is a complex situation because of the emergency nature at the national level, since there are many provinces involved," said Rodrigo Cuba, Disaster Response Director at the Argentine Red Cross. "Fortunately, the flooding has settled in some provinces, particularly in the East of Tucumán and Santiago del Estero."

If the rain keeps coming, farmland will continue to be aggravated. Forecast models show that rain will continue in the affected provinces over the next two weeks. Soils should begin to dry by mid-February, an analyst from Refinitiv Agriculture told Reuters.

Any further rain could have serious economic implications, Julio Calzada, chief economist of the Rosario Cereal Exchange said.

"The harvest will depend on the climate and the economy will depend to a great extent on the harvest," Calzada said.  "The concern is that the volatility of the climate could continue until the end of January.”


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