Exports from the Argentine countryside: from the historical record in 2022 to the blow of the drought

The Chamber of the Oil Industry of the Argentine Republic (CIARA) and the Grainl Export Center (CEC) reported that the accumulated foreign exchange earnings from agricultural exports reached US$40.438 billion in 2022, the best year since they keep records and are 22% higher than what was achieved in 2021.

However, the outlook for 2023 is not positive, mainly due to the impact of the drought on production.

HOW MUCH DID THE ARGENTINE COUNTRYSIDE EXPORT IN DECEMBER?

CIARA and the CEC reported that in December the settlements of the agro-export sector reached US$3.706 billion, as a reflection of what was the export increase program, known as the soybean dollar, also implemented during the month of September.

The agricultural exporter is the sector that enters the most dollars into Argentina, in a year in which exports could reach US$100 billion, according to the Ministry of Foreign Affairs, which would be a record figure. However, according to INDEC, between January and November a total of US$82.293 billion was sold abroad.

The grain oilseed complex, including biodiesel and derivatives, contributed 48% of Argentina’s exports in 2022, according to INDEC data. The country’s main export product in 2022 was soybean meal (14.2% of the total), followed by corn (11%) and soybean oil (6.9%).

PESSIMISTIC PROJECTIONS FOR AGRICULTURE IN 2022

Due to the La Niña phenomenon and the drought that impacted the core zone of Argentina, the productive heart of the country, the harvest and export projections of the agro-industrial sector are not positive for this 2023.

According to a report from the Rosario Stock Exchange (BCR), “the lack of humidity as a result of the Niña event causes the planted area to fall in the new campaign and augurs the lowest grain production in 5 years.”

As a result, the export of the main agricultural products would total about 82 million tonnes (mt) in the 2022/23 campaign, “considerably below the more than 100 mt estimated for the 2021/22 campaign.”

“Based on the prices and volumes currently projected for 2023, effective exports of grains and derivatives are expected for US$37.5 billion,” said the BCR, which would imply a drop of 7.27% compared to what was liquidated during 2022, which will result in fewer dollars for the weak reserves of the Central Bank.

With information from Bloomberg