GIEWS Country Brief: Argentina 23-October-2019
- Maize production in 2019/20 estimated at record high level
- Area sown to 2019 wheat crop estimated at high level, but production outlook uncertain
- Maize exports at historic high in 2019/20 marketing year due to bumper output and weak currency
- Grain prices high and rising in September due to high demand for exports and increasing inflation rate
Maize production in 2019/20 estimated at record high level
Harvesting of the 2019 maize crop was completed in July and production is officially estimated at a record high of 57 million tonnes, more than 40 percent higher than the five‑year average. The bumper production is due to larger plantings, which exceeded the five‑year average by more than 20 percent, combined with excellent yields following favourable weather conditions at flowering and grain filling stages.
Planting of the 2020 maize crop is ongoing with some delay due to dry weather conditions in the major producing provinces of Buenos Aires and Cordoba.
Area sown of 2019 wheat crop estimated at high level, but production outlook uncertain
Planting of the 2019 wheat crop was finalized in August and the preliminary official estimates suggest a record area sown of 6.6 million hectares due to the high level of prices. The crop is currently at developing and flowering stages in the main producing provinces of Buenos Aires, Cordoba and Santa Fe. Due to the low rainfall amounts since July, crop conditions as of early October are observed to be below average as shown in the Vegetation Condition Index (VCI) map. FAO’s preliminary forecast puts the 2019/20 wheat production at an above‑average level of 19.6 million tonnes, as the adverse impacts of dryness was more than offset by the enlarged plantings. However, uncertainties remain on future weather conditions and its impact on yield prospects.
Maize exports at historic high in 2019/20 marketing year due to bumper output and weak currency
Exports of maize, the major exportable cereal, in the 2019/20 marketing year (March/February) are anticipated at a record high of 35 million tonnes, reflecting abundant availabilities from the domestic production. In addition, the weakening of the local currency, which increased the competitiveness of domestic products on the international markets, is contributing to strengthen the demand for exports.
Exports of wheat in the 2018/19 marketing year (December/November) are expected at a near record level of 12.8 million tonnes, due to the bumper 2018 output, gathered in January 2019. The sharp depreciation of the Argentinian Peso has increased the demand by importers and it occurred when the 2018 wheat production declined in some major producing countries such as Australia, the Russian Federation and the European Union.
Grain prices high and rising in September due to high demand for exports and increasing inflation rate
Wholesale prices of wheat grain continued to increase in September, with seasonal pressure compounded by concerns over the impact of dry weather conditions on crops, currently at development stage. Prices were nearly 50 percent above their values a year earlier, in nominal terms, after the sustained increases of the past several months, mainly due to significant exports and reduced availability in local markets. High prices of wheat grain pushed up the prices of wheat products in retail markets, with prices of bread and wheat flour 60 and 50 percent, respectively, higher than in August last year. The increase in nominal prices is also closely related with the upsurge of the year on year general inflation, which increased by 52.4 percent in September in the Greater Buenos Aires Metropolitan Area.
Prices of yellow maize increased for the second consecutive month in September and were well above their year‑earlier levels. The high prices mainly reflect the strong exports boosted by the sharp depreciation of the country’s currency while further upward pressure stemmed from the dry weather hindering planting progress in some areas.