Argentinian economic takeoff in new harvest to reach US $ 2.34 billion

Date:11-09-2016

According to private reports from different entities, Argentinian exports will vary from US $ 29.8 billion to US $ 30.64 billion, representing an increase of 4% and 8% respectively, over the last crop season.

The 2016/2017 is the first crop season planted since Mr. Mauricio Macri took over as President of Argentina.

Estimated data by Rosario Board of Trade (BCR) and the Institute of Economic Studies and International Negotiations of the Sociedad Rural Argentina (SRA), that were published in Argentinian newspapers, mentioned that this crop season will provide an additional record of harvest currency between US $ 1100 million and US $ 2340 million over the last cycle.

It was explained that soybeans, the major agricultural crop, had tax withholding, though watered down, leaving the state with extra revenue of US $ 400 million in export duties, in comparison with the previous crop season. Beyond the numbers, it was outlined that forecasts were determined by the weather conditions and prices in the campaign.

It was mentioned that the takeoff in the sector, after the measures taken by the government regarding withholding and removing barriers to export, focused on corn and wheat.

According to SRA, the total area planted will be 34.3 million hectares after the implementation of these measures. It will represent an improvement by 6% or 2 million hectares compared to last year. The entity explained that it was "the highest level of planted area of all time" in the crops analyzed by them. They reminded that for the 2016/2017 crop season, wheat, corn and sunflower show growth and a decrease of 3% was expected in soybeans.

According to the Rosario Stock Exchange, in this context, the total 2016/17 grain harvest could exceed 122 million tons, 9% above last year. Of that volume, 90.36 million tons were exported, 9% more than in 2015/2016. Foreign sales of grain and oil by-products generated US $ 29,800 million (taking its FOB value crop), which is 4% or an additional US $ 1.1 billion compared to 2015/2016.

Although in this estimation the harvest grows by 9%, foreign exchange earnings grow at a low rate of 4%, due to the global fall in grain prices.

There is an improvement in oils and subproduct sectors, with an additional contribution in the value of exports of 16% and 14%, respectively, while it is estimated that the contribution in the total exports of grains would be slightly down by 2%.

In soy complex (grains and subproducts), more dynamism is expected in foreign sales. During this crop season, the complex will export almost 50 million tons, and the last cycle it averaged 45 million tons.

According to SRA, a harvest of 120 million tons of grain is expected for the new campaign, which is 13% higher than the previous one, with a contribution of foreign currency of US $ 30.639 million. This shows a growth of 8% over previous cycle.

Among the different crops, the soybean complex will generate US $ 21,844 million in foreign currency. This represents an increase by 4%. Corn and sorghum will reach US $ 4782 million, showing an improvement in the contribution of foreign currency of almost 29%.

For the 2016/2017 crop season, the United States Department of Agriculture (USDA) estimated record exports of corn by 25 million tons.

The SRA report estimated an increase in foreign currency by 13% in wheat over the 2015/2016, which is represented by US $ 1.626 billion. For sunflower, a contribution of US $ 1071 million is expected, with 38% more foreign exchange for the country's exports.