Cash-strapped Argentina needs rain now to save crops from drought
ARGENTINA’S farmers need precipitation to arrive within the next three weeks to stand any chance of emerging from a disastrous drought that has shriveled harvests and slashed agricultural exports.
Growers in the heart of the Pampas growing region, the so-called zona nucleo, need fresh rain in the coming days to moisten fields so they can sow wheat, said Cecilia Conde, chief crop analyst at the Buenos Aires Grain Exchange. Failing that, the bourse would have to cut back its forecasts for expanded acreage and higher production, which are predicated on the La Nina climate pattern coming to an end.
Agriculture is key to Argentina’s economy since the cashstrapped central bank needs US dollars from crop exports to arrest a slide of the peso.
Farmers are struggling to recover from three consecutive years of drought. Soy fields being harvested now will produce the least in two decades of record-keeping at the grain exchange, while last season’s wretched wheat crop slashed Argentine exports by two thirds.
Argentina, a top global food producer, has two growing seasons in the year: wheat and barley, then soy and corn.
El Niño
CONSISTENT rainfall isn’t likely until El Niño is better established in a few months. But some showers are predicted over the next few days and weeks.
Government weather maps published Monday night forecast up to 50 millimeters (2 inches) in the next week across much of the zona nucleo. That would dampen fields just enough to get wheat seeds in the ground, according to the Rosario Board of Trade.
Forecasters have said for months that rains would come as a La Nina climate pattern makes way for El Niño, which brings wetter weather in Argentina. But showers in the zona nucleo failed to arrive in the first quarter and have been largely elusive in the second quarter.
Robusta coffee
MEANWHILE, robusta coffee climbed to the highest since 2008 as forecasts for lower output in key producers threaten to tighten global supply.
Production in Indonesia, the third-biggest robusta grower, is projected to fall by 20 percent to 8.4 million bags in 2023-24 after heavy rains hindered pollination, while the increased humidity hit bean quality. Brazil’s coffee production is also seen falling, mostly due to lower robusta yields. Output and stockpiles are also expected to drop in top exporter Vietnam.
“Demand remains strong for robusta and the differentials have picked up in Indonesia and Vietnam, so we don’t know how much longer this rally can continue,” said Ryan Delany, founder of the Coffee Trading Academy.