A central concern for the government led by President-elect Javier Milei will be to determine the amount of dollars that the agricultural sector can contribute, especially in the short term. According to a report from the Rosario Stock Exchange (BCR), wheat will be the first crop to significantly contribute these coveted foreign currencies, totaling USD 1.4 billion between December and April.
Comparative Financial Performance
While the projected figures do not measure up to exceptional years like 2021/22, they are in line with the decade's average, reflecting a recovery from the impacts of adverse climatic conditions. The 2023/24 wheat commercial campaign is poised to yield USD 2.24 billion in exports, marking a 108.76% increase compared to the previous cycle, which was severely hampered by drought.
Production and Export Surplus
The anticipated production of 13.5 million tons is only two million tons higher than the preceding poor campaign. However, the exportable surplus is expected to reach an impressive 8.7 million tons. This increase is attributable, in part, to a significant carryover of grain from the previous cycle, due to lower-than-expected export levels. As a result, the final stock levels from the 2022/23 campaign are estimated at 4.3 million tons, marking the highest in eight years.
Challenges and Recovery
Despite challenges such as drought and higher-than-competitive prices, Argentina's wheat exports are on track for recovery. In the broader agricultural framework, soybean and corn, which are currently being sown under favorable climatic conditions unlike the past three cycles, make the most substantial contribution to foreign currency reserves.
The BCR notes recent improvements in rainfall, particularly in the eastern Pampas region. These rains are vital for replenishing water reserves in the soil, thereby boosting agricultural production. With the stage set for record soybean and corn yields this season, the contrast with the previous cycle's drought-impacted output is stark.
Argentina's agricultural sector, face with a myriad of challenges, is poised for a remarkable recovery. This resurgence is not only crucial for the country's economy but also sends a strong message of resilience and adaptability in the face of adversity.