Drought: soybean income lost by US $ 4200 million

The decrease in area and production due to drought had negative consequences for the entire soybean chain.

Grinding the oilseed The country's net foreign exchange output, given that soy flour, oil and biodiesel together account for 25% of national exports, would fall to the lowest levels of the last decade.

However, the adjustment will be less than the decline in cereal production, as imports of soybeans, particularly from Paraguay and other neighbors, but also from the United States, will increase during the 2017/18 campaign, to increase the supply and hold the crash. It is also estimated that some of the stocks accumulated in previous seasons will enter the commercial circuit and significantly reduce cereal exports.

Therefore, according to estimates from the Institute of Economic Studies of the Grain Exchange, the gross product of the soybean chain will be 26% lower in 2018 than it does. would have been if current expectations at the beginning of the agricultural cycle were met, rising from $ 16,213 million in the initial scenario to $ 12,010 million in the drought scenario. In terms of the economy as a whole, the decline in the value added of the $ 4200 million US soybean chain represents a 0.6% decline in Argentine GDP.

Most of these losses are concentrated in producers, who will resign $ 2,600 million in value added. From a tax perspective, they would receive about $ 1,400 million less from the state in terms of withholding taxes and other taxes that are levied on every link in the chain. If it is valued in terms of net exports, the impact is estimated at $ 4842 million

The author is an economist at the Buenos Aires Grain Exchange [19659008] questions in this note