Withering wheat

Droughts affecting 75% of Argentina’s agricultural land decimate the country’s wheat crop.

The Rosario Grain Exchange’s wheat production projections for 2022-2023 show a decline of more than 50% from last year’s total, with expected exports reaching seven million tonnes compared to 14.5 million in 2021-2022. Wheat production has been hit by prolonged droughts and frosts which will result in the smallest crop in seven years.

A large wheat farmer in Argentina was distraught, “It’s been a disastrous season, first the droughts, then the frost. It is too early to assess the economic damage but there is one certainty, and that is that we are not going to be able to meet domestic demand while delivering what has been committed to exports.”

“It’s been a disastrous season, first the droughts, then the frost […] we are not going to be able to meet domestic demand while delivering what has been committed to exports.”

Large wheat farmer, Argentina

In the face of these challenges, the government is studying the possibility of allowing wheat shipment delays to satisfy the needs of the domestic market. Local producers are calling on an urgent decision from the government to renegotiate contracts with international customers. A spokesperson for CEC, Argentina’s grain exporting chamber, said that customers in Indonesia, Morocco, Algeria, and Egypt would be the most affected by the decrease in exports. At the same time, Brazil is seeking alternate wheat suppliers with a specific focus on US, Canada, and even Russia.

A commodities trader in Buenos Aires explained the macroeconomic implications, “Considering Argentina’s economic situation, and its dependence on agriculture, and the need for foreign currency via exports, the fact that today we are looking at how to honour international commitments, which are not going to be honoured, it is all terrible news for Argentina as a whole.”

The “Mesa Nacional de Monitoreo de Sequías,” a supervisory body of the Ministry of Economy which monitors the impact of droughts in agriculture, reported that 126 million hectares or, 75% of the country’s agricultural lands, have been affected by droughts in the last three years. The phenomenon has severely impacted the central regions in the country which mainly produce wheat and soya. “Climate is crucial for agriculture,” explained the wheat farmer, “and it works both ways but years like this one should be the exceptions. We will survive but we must be prepared, as we are seeing the frequency of extreme weather events increasing and that has never happened before.”

“We are investing in more efficient machinery, digital tools and even looking a biotechnological solutions but if we see persistent droughts year after year even that isn’t enough.”

Large wheat farmer, Argentina

As changing global climate conditions have seen a dramatic increase in the frequency of severe droughts several countries in Latin America are considering genetically engineered crops to ease production concerns. Argentina gave the green light to the HB4 wheat strain in 2020. HB4 has the potential to improve wheat production by 20% under dry and warm conditions. If approved by importing countries, genetically engineered wheat could offer a vital lifeline to Argentinean producers and exporters. The farmer concluded, “We are investing in more efficient machinery, digital tools and even looking a biotechnological solutions but if we see persistent droughts year after year even that isn’t enough.”

Important Notice
While the information in this article has been prepared in good faith, no representation, warranty, assurance or undertaking (express or implied) is or will be made, and no responsibility or liability is or will be accepted by Deheza Limited or by its officers, employees or agents in relation to the adequacy, accuracy, completeness or reasonableness of this article, or of any other information (whether written or oral), notice or document supplied or otherwise made available in connection with this article. All and any such responsibility and liability is expressly disclaimed.
This article has been delivered to interested parties for information only. Deheza Limited gives no undertaking to provide the recipient with access to any additional information or to update this article or any additional information, or to correct any inaccuracies in it which may become apparent.

Most recent in Commodities

Sorry State of affairs

Bolivia’s blurred lithium vision.

Superstar soybean in South America

Navigating challenges and embracing advancements.

Where the money grows on trees

Making sense of Uruguay’s forest boom.

The ‘berry’ best

Blueberries become Peru's leading agricultural export, surpassing coffee and grapes.

Green shoots

Argentina’s lithium industry continues to grow, despite the country’s economic woes.

Meat meeting

Livestock entrepreneurs assemble in Bolivia to consider growth of beef exports.

Agtech booms

Venture capital funds flow into Latin American agtech.

The appeal of steel

Steel production is growing in Latin America

Missing the key ingredient

Amidst inflationary pressures, Mexico could ration cooking oil.

Ensuring the brew

Adverse climate conditions are affecting LatAm’s coffee production.