Jun. 3, 2019
By Leonardo Gottems, reporter for AgroPages
The sale of inputs for the next agricultural season of 2019/20, which will begin in a few days with the planting of wheat, is showing significant growth compared with last year, according to data from the main Argentine company agrochemicals, Red Surcos.
"Pre-season is doing very well and we are at a 15% higher turnover than this time last year, with prices of inputs that did not increase. This indicates that there are more investments being made in technology from producers," said the president of the company, Sebastián Calvo.
The executive considered that there are a couple of central factors that are influencing this positive conjuncture. The first is a very good harvest, with high production volumes. "This predisposes to invest and constitutes a very different situation to the one we had at this point in 2018," he said.
The second is the climate, which continues to be favorable to the main productive areas, beyond the difficulties that cross some northern regions.
In this context, wheat planting is expected to exceed 6.5 million hectares. "It will be another year to bet on high yields, which generate a great volume of harvest, but also to the quality, and for all that, there will be strong investments in technology, basically in terms of fertilization and fungicides, which we are already seeing with the purchases and the consultations we receive," said Calvo.
The president of Red Surcos acknowledged that there is a factor that puts the brakes on the enthusiasm, which has to do with the uncertainty about the future of the country's economy and the fact that the harvest will take place after the elections.
In any case, the executive said that the input-output ratio remains favorable, despite the recent fall in the prices of grain, if measured in historical terms. "The inputs did not increase with respect to last year and will be maintained," he said.
In this context, he said that all of the suppliers of inputs would finance, as they do every year, some 10 billion dollars. "It will be a challenge, but we are achieving it," said the executive.
In the case of Red Surcos, they are offering rates of 3% per month in pesos, well below financial market values. In dollars, it has monthly rates of 0.5%. "Many producers are inclined to this alternative because they ultimately produce dollars and that is why they have no risk if there is a sudden change in the exchange rate," Calvo said.
He added that there are also alternatives in exchange for grain and forward contracts, among other possibilities. "In our case, we are seeing very good demand for the hormonal products with nanotechnology that is used mainly in the fallows, such as the 2,4-D (we have the Dédalo Elite) and Dicamba (we have the Cowboy Elite), but also in the case of fertilizers, especially phosphors," he said.
In short, a new campaign opens with very good prospects, because most of the producers harvested good volumes and the climate will continue to aid them. Thus, beyond the uncertainties, there is already a new growth of investment in technology, which will ensure another productive and sustainable jump in agriculture in Argentina.