Despite the political upheaval in Argentina, which seems to have temporarily quietened, whether preparing for an even worse storm, or heading for a reasonable path of rationality yet to be seen, the country one of the world's most efficient breadbasket, is again managing extraordinary crops of corn and wheat.
In effect according to the Rosario Stock Exchange's Strategic Guide for Agriculture, foreign sales of the coming 2022/23 corn season already reached a record six million tons, the largest in recent grains history.
This even when the next season has been imposed a marketing limit of ten million tons to ensure domestic demand supply and prices.
Meantime the 2021/22 corn harvest has totaled exports of 28,5 million tons, out of a production plus stocks estimated at 53 million tons. This volume exceeds the 53,7% of last year and the 43,2% average of the last five seasons.
Regarding wheat Argentina is forecasted to produce 18,5 million tons in the coming 2022/23 harvest, according to estimates made public by the US Department of Agriculture. In the previous crop 2021/22, production reached 22,5 million tons.
With stocks in the country, under an agreement reached with government again to safeguard domestic demand and bread prices, the total supply should be close to 20,5 million tons by the start of the next year. Wheat exports are expected to total 12.85 million tons. Domestic demand is anticipated at 6,4 million tons.
The political situation in Argentina with almost depleted international reserves, and a couple of fiscal and foreign debt time bombs ticking, which has meant a drastic reduction in imports, has had an impact on the country's leading trade partner, Brazil. In effect with insufficient dollars to pay for winter energy heating and critical inputs for industry, Brazilian manufacturing and companies feel they will face a tall challenge trying to sell, or at least keep the current trend, to an almost broke Argentina
In the first half of the year, Brazil exported US$ 7.5 billion to Argentina, a growth of 33.3% compared to the same period in 2021. According to experts, however, this scenario should change drastically with the measures of the Argentine government to contain the imports and promote exports.
“The country has nowhere else to plead for dollars,” says Soledad Duhalde, director of Buenos Aires-based consultancy Abeceb. As a result, according to José Augusto de Castro, executive president of the Brazilian Foreign Trade Association, shipments to Argentina should decline by 20%.
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