A record drought has deeply affected Argentina's agricultural production, dealing another blow to the economy and hurting exports of key commodities such as soybeans.
"We have been witnessing a historic drought, completely atypical, with abysmal damage, especially for the Argentine economy," said Salvador Vitelli, chief researcher at Romano Group, an economic and financial consultancy firm in Argentina.
"It has been the worst drought of the century. It is estimated that the loss of the exportable balance will be between $20 billion and $22 billion, in terms of production value."
One of the most affected agricultural products has been soybean, which accounts for about 3.5 percent of the country's GDP and is a large generator of foreign currency.
A heat wave accompanied by flash frosts in late February and into the middle of March has left a trail of despair, uncertainty and anguish throughout the countryside.
The drought has led to rises in soybean prices on the global market, rises that were limited by a bumper crop in Brazil.
About 70 percent of the US dollars that Argentina has received over the past 20 years from exports are related to agriculture and the related value chain, Vitelli said. "Therefore, it is clear … how important the agricultural sector is in terms of economic aggregates."
Lower output
CREA, a nonprofit civil association in Buenos Aires made up of and directed by agricultural entrepreneurs who meet in groups to pool their expertise and knowledge, warned that the soybean yield in Argentina will be 41 percent lower this year than that expected at the beginning of the season.
And expectations are for a yield of 49 percent for the second harvest because the crop "was severely affected by an unprecedented early frost in February", CREA said.
"Ninety-five percent of CREA farmers reported having experienced drought damage in the last four months, while another 45 percent and 7 percent reported production losses due to frost and hail (respectively)."
Cristian Russo, an agronomist with the Rosario Board of Trade, a nonprofit association in a key agricultural region 300 kilometers northeast of Buenos Aires, said the drought has left no subsector untouched. "In order to have a good season we need something that is especially important for corn and soybean planting, and that is good rainfall this autumn. Unfortunately, it was bad news that April did not meet what was expected … (with) only 30 percent of the rainfall that was expected."
The heat wave in March led to the worst national yields in the past 15 crop cycles, the not-for-profit Rosario Board of Trade said.
"Argentina had been suffering from an unprecedented drought since before planting," the association said in a report last month. "The heat wave aggravated the effects of thermo-hydric stress, taking them to an extreme that is unprecedented for the sector."
The writer is a freelance journalist for China Daily.
