The Buenos Aires grains exchange said on Wednesday it could slash its forecast for Argentina’s 2022/23 soybeans and corn production by up to 25% if a prolonged drought in the South American country’s agricultural region continues.

Argentina is the world’s third-largest exporter of soybeans and corn and a key international supplier of wheat, but a drought that began plaguing Argentina’s core agricultural regions in May is threatening output and pushing back planting.

The exchange currently forecasts 35.5 million tonnes of soybean and 37.8 million tonnes for corn this harvest as a worst case scenario, if the lack of water continues.

In September, it had forecast 48 million tonnes of soybean and 50 million tonnes of corn this cycle.

Lack of water in the soil is also delaying planting of both crops, it added, impacting their productivity.
Regarding the 2022/23 wheat cycle, the exchange expects a 12.4 million tonne harvest, down from the 22.4 million tonnes collected in the previous cycle.

The exchange said “the absence of rainfall, depleted water reserves, rising maximum temperatures and an increase in the atmospheric demand for humidity limit the growth of crops.”

The harvest impact could reduce Argentina’s economic growth by 1.8% this year and potentially entail a $11.63 billion loss in grain exports, the exchange said.

On Tuesday, the exchange had forecast a likely break in coming months, with rainfall expected at normal levels by the end of March, later adding this could improve soil conditions for the 2023/24 campaign.

Source - https://www.hellenicshippingnews.com