The worst drought of the last 60 years in Argentina has ended.
The rains that have fallen in the last ten days in the center of the South American country bring relief for the next planting season, although they have arrived too late to reverse the advanced deterioration of crops this season, with estimated losses of up to 15,000 million dollars. according to the Rosario Stock Exchange (BCR).
The expected drop in income from the agro-export sector, the main source of foreign currency income, puts President Alberto Fernández in trouble in his last year in office and reduces his chances of running for re-election.
"The last day of summer was the first day of a new script for the Argentine climate," stressed the BCR in its weekly report.
The main grain market in Argentina explained that "the high pressure center that had been limiting the development of storms from the central east of the country finally moved" and the storms left "very good coverage and significant accumulations in the center of the Pampas region ”.
On average, about 50 millimeters of rainfall was recorded in the core region, as the most productive area in Argentina is known.
However, its distribution was uneven: In the center and southeast of Santa Fe, one of the provinces hardest hit by lack of water, rainfall exceeded 100 millimeters, as in neighboring Entre Ríos.
The province of Buenos Aires, the largest in the country, was left out.
Only isolated rains were recorded in some areas, barely exceeding 10 millimeters.
The improvement in future forecasts does not change, however, the bleak outlook for this season.
The corn and soybean plantations have been severely affected by the lack of water and the late rains will not be enough to recover them.
“It was a cumulative drought for three consecutive years,” Cristian Russo, an agronomist and head of agricultural estimates at the Rosario Stock Exchange, pointed out a few days ago.
According to a survey prior to the rains, "in soybeans of the 49 million tons that were expected to be produced, the forecasts were lowered to 27, a 45% loss.
The other important crop, corn, went from 54 million to 35 ″, he adds.
Rosario's ranchers and siblings, Joan, Nadia and Dritter Hofer, pose in their drought-ravaged cornfield.Sebastián López Brach (Getty Images)
In the first three weeks of March, some 2,000 trucks a day entered Argentina's grain-exporting ports, concentrated in Rosario and its surroundings.
The figure represents a drop of more than 50% compared to truck traffic in the same period in 2022, according to data from the consultant Javier Preciado Patiño cited by the
Up to March 23, 125 grain vessels were loaded, compared to 216 in 2022. The volume of soybeans traded to date is the lowest in the last two decades.
In corn, sales to processing industries and exporters are the lowest since 2016.
The harvest will end at the end of May and it will be then when there are more accurate figures, but estimates from different organizations speak of losses close to 15,000 million dollars.
If confirmed, it would exceed the bad numbers of 2009, when that year's drought meant losses of 14.3 billion dollars.
More deficit and inflation
This is a hard blow for the entire agro-industrial chain and also for the Government.
The decrease in state revenues due to export taxes makes it even more difficult to comply with the deficit reduction plan agreed with the International Monetary Fund in exchange for the restructuring of a debt of 44,000 million dollars.
The agreement also included the accumulation of 5,000 million dollars in reserves per year, an unattainable goal this year.
Joan Hofer walks among dry soybean plants in San Jerónimo Sud, in the Province of Santa Fe.Sebastián López Brach (Getty Images)
The drought, added to the record number of heat waves registered this summer, also played against the battle that the Fernández Executive is waging against one of the weakest points of the Argentine economy, inflation.
Thousands of cows died of thirst in the Argentine fields and the shortage of grass made the maintenance of cattle more expensive.
The difficult situation led to significant price increases in both meat and dairy products.
In February, the value of food shot up almost 10% from the previous month and exceeded 100% annually.
If the normalization of rainfall is confirmed, its beneficial impact on the next agricultural campaign will begin to be felt next year.
It will be a boost for the government that Argentines choose at the polls in October.
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