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19/09/2017 0:00 - Agricultural Commodities Market
EMILCE TERRÉ
USD 180 million worth of wheat exports lost due to adverse climate

2017/18 wheat production forecasts were cut by 1 MT due to 150,000 hectares that will remain unplanted due to excess moisture and 135,000 hectares lost to intense rains in Buenos Aires and La Pampa. These losses could have amounted to an additional USD 180 million worth of exports.

According to a monthly report published by the Rosario Board of Trade’s Strategic Guide for Agribusiness office, waterlogging has resulted in a reduction of 150,000 hectares in wheat plantings. 135,000 hectares that had already been planted in La Pampa and Buenos Aires have also been lost due to rains that have doubled recent averages. Prevented plantings and total losses have shaved 285,000 out of expected wheat crop area in the main producing provinces.

If we assume historic trend yields for the past ten years of 3.7 tons per hectare for Buenos Aires and 2.5 tons per hectare for La Pampa, the “opportunity cost” amount to about one million tons. Given that domestic consumption has remained relatively stable at around 6 million tons, these should be discounted from exports. This loss of one million tons represent about 10% of initial export estimations for the 2017/18 marketing year.

According to the Ministry of Agroindustry, the FOB value for new crop wheat stands around USD 180 per ton. As a result, we could estimate that the lost crops (assuming no replanting is made) could have yielded about 180 million dollars in exports. This does not represent true economic cost given that the reduction in production will represent fewer costs in terms of inputs and logistics.

 

Besides, we must consider that not only is wheat at danger, but there is still corn to be harvested. As weeks go by and rain forecasts keep appearing there is worry about how the 2016/17 corn-marketing year will close.

 

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Institutional Video of the Bolsa de Comercio of Rosario (Rosario Board of Trade)

 Rosario Board of Trade

The Rosario Board of Trade is a centennial institution located in Rosario, in the most important agroindustrial zone of Argentina. Throughout its history it has created and boosted transparent, solid and reliable markets: the Grains Physical Market, the Futures Market, the Capital Market, and the Livestock Market.

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