Friday, June 14, 2024

ECONOMY | 23-05-2023 09:07

Argentina’s crisis-wracked economy needs rains now to save crops from drought

Farmers in Argentina need rainfall within the next three weeks to have any chance of emerging from a disastrous drought.

Argentina’s farmers need precipitation to arrive within the next three weeks to stand any chance of emerging from a disastrous drought that has shrivelled harvests and slashed agricultural exports.

Growers in the heart of the Pampas region, the so-called ‘zona núcleo’, need fresh rain in the next few days to moisten fields so they can sow wheat, said Cecilia Conde, chief crop analyst at the Buenos Aires Grain Exchange.

Failing that, the bourse would have to cut back its forecasts for expanded acreage and higher production, which are predicated on the La Niña climate pattern coming to an end.

Agriculture is key to Argentina’s economy since the cash-strapped central bank needs US dollars from crop exports to arrest a slide of the peso.

Farmers are struggling to recover from three consecutive years of drought. Soy fields being harvested now will produce the least in two decades of record-keeping at the grain exchange, while last season’s wretched wheat crop slashed Argentine exports by two-thirds.

Argentina, one of the world's leading food producers, has two growing seasons in the year: wheat and barley, then soybean and maize.

Rains last weekend were good news for wheat growers, “but more are needed,” Conde said.

The repercussions of another failed harvest would be felt by the world’s feedlots and by agriculture traders from Chicago to Singapore. Global grain markets have been upended by droughts — curbing production and causing transportation bottlenecks on rivers in the United States and South America — and by the Russia-Ukraine war.

Consistent rainfall isn’t likely until El Niño is better established in a few months. But some showers are predicted over the next few days and weeks, according to local agro-climatologists Eduardo Sierra and Leonardo de Benedictis.

In an interview, Sierra said only a couple of showers are needed to be able to plant wheat, and they will apparently arrive in June.

Government weather maps published Monday night forecast up to 50 millimetres (two inches) in the next week across much of the zona núcleo. That would dampen fields just enough to get wheat seeds in the ground, according to the Rosario Board of Trade.

Meteorologists have said for months that the rains will arrive when the La Niña weather pattern gives way to El Niño, which brings wetter weather in Argentina. But rains in the core zone failed to arrive in the first quarter and have been rather elusive in the second quarter.

by Jonathan Gilbert, Bloomberg


More in (in spanish)