Wheat exports to reach $ 2.8 billion, highest level since 2012

The arrival of the last month of the year launched the new marketing campaign of corn and with him the possibility of alleviating, at least in part, the pressure on exchange rates due to the greater supply of currencies.

The Analysts estimate 2020/21 crop year could exceed $ 2.8 billion in exports thanks to good international prices. If this scenario is confirmed, this would be the highest level of values ​​since 2012.

Strictly speaking, the severe drought, which particularly affected winter crops in the country, sowed doubts during the year on the impact this could have on production and the exportable balance sheet, but a series of climatic factors also affected other major players in the world triggered the rise in international grain prices.

According to estimates from the Rosario Stock Exchange (BCR) the average export price of wheat cereals “is projected at US $ 259 per tonne, a 30% increase over the previous season”, while the average price of wheat flour is projected at a price average of US $ 402 per tonne, also determining an improvement of around 30% compared to the 2019/20 season.

But as is often the case, good prices are the downside of production. The climate is not estimated to fully support production in the United States and the Black Sea region (Russia, Ukraine, etc.) next winter, impacting prices in a context of sustained demand.

In the case of Argentina production was also affected by the lack of rain. More precisely, for this campaign a volume of 16.7 million tonnes is expected, 15% less than the previous campaign where 19.5 million tonnes were totaled.

The final result of this harvest contrasts sharply with the 21/22 million forecast at the start of the season.

In a particularly dry season in the middle of winter, the arrival of water had to wait almost until October, with which there was an irreversible impact on returns.

The current average of 28.4 quintals per hectare represents a substantial drop compared to 29.9 quintals the previous season and a significant drop compared to 33.4 quintals for the 2016/17 campaign and well below the record of 36 quintals per tonne reached in 2010/11.

On the other hand, a report from the Rosario Stock Exchange assures that in recent years, the demand profile for Argentine wheat has changed, Mercosur loses its participation and turns to Southeast Asia.

In the 2009/10 campaign, Mercosur represented 98.6%, then destinations on the African continent increased, such as Cameroon, Côte d’Ivoire, Nigeria, South Africa and Tanzania. But in the last three or four seasons, the participation of Southeast Asian countries has increased significantly like Indonesia, the world’s second largest importer of wheat, Bangladesh, the Philippines, Thailand and Vietnam.

After the signing of the Integral Regional Economic Association (RCEP) on November 15 between China, Japan, South Korea, as well as the countries of the Association of Southeast Asian Nations (ASEAN) led by Indonesia, Thailand, Malaysia and Vietnam, new challenges are presented for Argentinian wheat.

Are Australia and New Zealand part of the group and are big producers of wheat. “The implementation and development of RCEP are certainly a central issue of interest for the Argentine wheat sector”, given that “this will delineate commodity placement opportunities in Southeast Asia,” Rosario Stock Exchange said.

Despite this, he pointed out that “Australian exports will not be enough to fully supply RCEP.”