Thursday, November 30, 2023

ECONOMY | 04-07-2023 16:56

Drought slashes Argentina’s soybean production by 51.5%

Impact of punishing drought on Argentina’s crops laid bare as new report reveals soybean production came in at 21 million tons – less than half of last year’s harvest.

A punishing drought slashed soybean production in Argentina this harvest to less than half of last season’s total, a new report has revealed.

Soybean production totalled 21 million tons in the 2022-2023 season, a year-on-year drop of 51.5 percent. The figure is the lowest in more than 20 years and the worst harvest since records began in 2000, according to data from a study from the Buenos Aires Grain Exchange released on Tuesday. 

In Argentina, one of the world's largest exporters of the oilseed, total soybean production was 22.3 million tons lower than in the previous season, when it reached 43.3 million tons.

"The drought, coupled with high temperatures recorded over the centre of the agricultural region during much of the crop cycle, have resulted in losses of harvestable area ... and have generated a significant decrease in yields," a statement from the exchange said.

According to the report, almost all the nation’s growing areas were affected, with yields falling by 45 percent overall to the worst level in 10 years, with an average of just 15.4 quintals per hectare.

President Alberto Fernández’s government estimates the drought will lead to overall losses of around US$20 billion, almost three percent of gross domestic product.

Argentina was the world's third-largest producer of soybeans in the 2021-2022 season, trailing Brazil and the United States. The country is the globe’s leading supplier of soybean meal and soybean oil, as well as ranking third in global maize exports.

Two industry groups, CIARA (Cámara de la Industria Aceitera de la República Argentina) and CEC (Centro Exportador de Cereales), report that exporters liquidated US$1.58 billion in June, a 59 percent year-on-year drop and 62 percent less than in the previous month. Measured by value, the grain and oilseed sector lost 42 percent of exports in the first half of 2023, compared to the same period the preceding year.

Rosario, the country's largest agro-export hub, recorded a sharp drop in the volume of grain unloaded in the first half of the year, registering 12.6 million tonnes, 60 percent down on the previous year and the lowest amount since 2001, according to the Rosario Stock Exchange.



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