The revival in Argentina’s wheat crop will be much lower in 2009-10 than had been hoped, the US Department of Agriculture said, slicing to 9.5m tonnes from 11m tonnes its production forecast.
While an improvement on last year’s 8.4m-tonne harvest, the new forecast level implies that Argentina’s wheat growers will continue to punch well below their historical weight.
Their annual output averaged 15.0m tonnes in the decade before drought set in last season.
Effect on trade
The effect of a second successive weak harvest on trade would be to cut exports even further below the long-term average of 10m tonnes a year.
Without the large carryover stocks which helped maintain shipments at 5.5m tonnes in 2008-09, Argentine wheat exports will fall to 4.0m in 2009-10, the USDA said, cutting 1.5m tonnes from its previous forecast.
Exports have not been lower since 1988, when they hit 3.7m tonnes. They were also at 4.0m tonnes in 1989, official US data shows.
Besides being a problem for farmers, low wheat shipments may present a headache for the government too, given Argentina’s reliance on agriculture for exports and income.
Global production increase
The revisions reflected "continued dryness in central growing areas and reduced prospects for seeded area", the USDA said in its monthly report on world crop supply and demand.
However, the USDA report added 420,000 tonnes to estimates for global wheat production in 2009-10, thanks to promising crops in the US and the former Soviet bloc, defying the forecast cuts being made by many analysts in the region.
Russia’s wheat harvest was on track to hit 60m tonnes, 1m tonnes higher than previously forecast, with 500,000 tonnes added to forecasts for neighbouring Kazakhstan and Ukraine.