(Photo: Estimation Chief Esteban Copati during the presentation)
Buenos Aires, September 26th. This week, the Buenos Aires Grain Exchange (BCBA as its Spanish acronym) launched its first estimation on 2018/19 national harvest. Estimation Chief Esteban Copati said that they are seeing an increment in the planted area, to a record of 33.5 million hectares. The double-crop wheat/soybean is one of the largest contributors to this expansion year versus year.
Previously, Economist Chief Agustin Tejada explained that changes in the export taxes to grains, imposed by national Government in late August, affected the dynamic of the 2018/19 campaign by a drastic change in the economic equation (gross margin) of the main crops. The Government imposed export taxes around 11% to cereal from previous 0%, that reduced 8 percentual points the gap respect the soybean.
Since farmers were affected by a severe drought during 2017/18 season that cut, for instance, the expected soybean production from 54 MMT to the final 35.1 MMT, financial aspects of the planting decision were too much influenced by the new export taxes scenario. Soybean is a cheaper crop than maize, that requires nitrogen fertilizers; furthermore, the corn hybrid bag is too much expensive than the soybean one.
With this economic framework, the BCBA analysts expected an increase of 200,000 hectares planted of soybean in this campaign to 17.9 million hectares. First production estimation was placed at 53 MMT versus 35.1 MMT in the 2017/18 season.
But farmer’s decisions (like seed and fertilizers purchases) took before the new export taxes framework did that corn area was not largely affected. The BCBA estimates that 5.8 million hectares will be planted this year, with an estimated and record production of 43 million metric tons.
Perhaps, the corn area would have being larger with 0% of export taxes, but early seedings were decided before the Government imposed an 11% of duties.
During the presentation, Copati said that wheat production marches to a record harvest of 19.7 MMT; the condition of the crop in the major production areas of Argentina are from good to excellent, and higher yields are expected this year.
In the following chart, www.eFarmNewsAr.com resumes the area and production expected for the main crops, this 2018/19 season.
Chart: Argentina grain production 2018/19 season
Source: Buenos Aires Grain Exchange