Argentina's Consortium of Agri Firms Warn of USD 20 bn Loss to Crops from Drought, Frost

Argentina, the world's top exporter of soybean oil and soymeal and the third-largest corn exporter, has been hit by a severe drought described as the worst in 60 years by the Rosario grains exchange in Santa Fe province.

"Argentina is on track to lose more than USD 20 billion this year due to agricultural losses caused by a climate disaster that affected most productive regions with drought and frost," according to a report by the CREA consortium.

CREA predicts a soybean harvest of 31.2 million tonnes for the 2022/23 season, down from an initial forecast of 50 million tonnes. Corn farmers are expected to produce 38.6 million tonnes this season, down from 55.2 million tonnes predicted six months ago.

According to the most recent estimates, Argentina will produce 38% less soy and 30% less corn than previously predicted. CREA stated that forecasts could be revised even lower in the coming weeks.

Argentina and neighbouring countries have been suffering from drought conditions since 2019, with the last four months of 2022 receiving less than half of the average precipitation: the lowest rainfall in 35 years. This, combined with high temperatures, has caused widespread crop failure. 

The Buenos Aires grains exchange said on Thursday that it would reduce its current soybean harvest forecast of 33.5 million tonnes in the coming weeks, but did not specify by how much.