January 11, 2011
Soy production in Argentina set to drop due to drought
Argentina is suffering from a severe damage to its soy crop amid an ongoing drought.
The world's third-largest soy exporter will have an immediate decrease in its soy production this season, according to local agricultural consultants AgriPac.
Its crop is not likely to top 40 million as compared to earlier predictions that Argentina's soy production will hit 55 million tonnes this season, AgriPac analyst Pablo Adreani said.
An international grain rally was held in December after the drought brought damage to Argentina's soy and corn crops, with prices moving to two-and-a-half year highs due to the predictions of failed crops in the country.
Farmers are praying for a miracle, that a major storm will soak the region's parched fields. "Only a miracle can stop the damages trend in the South American soy crop", Adreani said. However, the odds seem to be against it for the season.
The next two months is predicted to be hot and dry because of the La Nina weather phenomenon. La Nina brings about the cooling of the ocean temperatures off the Pacific coast of South America and a dryer weather to the south continent while showers are expected to the north.
The weather phenomenon also threatens to dry up crops in Paraguay, a distant fourth in terms of world soy exports, and in Uruguay, a small, but growing soy producer. The La Nina will be at its most intense in decades this season, according to the Buenos Aires Cereals Exchange.
About 20% of Paraguay's crop is at risk, while almost a third of Uruguay's crop is suffering from the drought, Adreani said.
As a result of the drought, Argentina's corn crop has already been heavily damaged, although light showers last week have helped to halt the decline in the world's second-leading corn exporter.
Adreani also said that Argentina's corn production is unlikely to top 17.5 million tonnes this season, down sharply from early expectations for about 25 million tonnes.
