As President Mauricio Macri actively dismantles long-standing export tariffs, Argentina looks to re-establish itself as a top commodity exporter. Concerns over slowing production due to the ongoing drought in key Northeastern provinces could dampen the export prospects for corn and soybeans—the country’s top agricultural exports.
At 57.8 million tonnes, soybeans remain Argentina’s biggest crop ahead of corn, which also hit record production with 41 million tonnes in 2017. Harvested soybean area fell by more than 1 million hectares in 2017 from 19.53 million hectares in 2016 largely due to drought. However, drought isn’t likely to stem the tide of increased corn and soybean production in Argentina. Export tariff cuts, an uncertain future for NAFTA that could boost exports to Mexico, and the fate of the US Renewable Fuel Standard (RFS) will probably determine crop export value more than drought.
Growth in 2017 harvested wheat area and high yields at 3.31 tonnes per hectare indicate that wheat was largely unaffected by the country’s dry, hot weather. Exports have grown considerably in recent years, but export volume growth is expected to slow in 2018.
President Macri’s agricultural trade policy reforms also extend to the beef industry. The Macri administration wants to phase out the 15% beef export tariff in hopes of future growth in the sector. The European Union (EU) is now increasing access to its beef market as it negotiates to secure a trade deal with the Mercosur trade bloc of Argentina, Brazil, Paraguay, and Uruguay. With lower feed prices, the Argentine beef industry can expand and take advantage of this new trade opportunity.
Agricultural commodities are increasingly becoming a bargaining chip for expanded global trade, and Gro Intelligence provides the tools necessary for subscribers to stay up-to-date on crop production and trade trends.