Argentina's wheat exports to fall sharply as drought shrinks crop


BUENOS AIRES, Nov 11 (Reuters) - Argentina's wheat exports this season will not quite reach half of last season's shipments, the Rosario Grains Exchange (BCR) said on Friday, with only 7 million tonnes of exports expected after months of dry weather halved the 2022/2023 harvest.

During the previous 2021/2022 crop, the South American agricultural powerhouse exported 14.5 million tonnes of wheat.

Reduced wheat exports from Argentina are also bad news for global wheat supplies, already dented by poor weather in the United States and Russia's invasion of Ukraine, all major producers of the grain.

Exports from Argentina's massive farm sector are crucial sources of foreign currency for the government, since wheat is purchased mostly in U.S. dollars.

Battered by prolonged drought conditions in prime farmland plus more recent cold snaps, the wheat crop gathered between November and January is seen totaling just 11.8 million tonnes, according to the BCR, down by half compared to 23 million tonnes produced in the previous crop.

If the production forecast proves correct, it would mark the smallest wheat crop in seven years.

The separate Buenos Aires Grains exchange on Thursday lowered its 2022/2023 wheat harvest estimate to 12.4 million tonnes from 14 million tonnes previously.

The BCR estimated that $2.22 billion in export revenues would be lost this season due to lower wheat exports.

The weaker harvest is straining Argentina's ability to meet domestic demand as well as already agreed exports.

Last week, the government gave exporters license to push back by 360 days some wheat shipments scheduled for between December and February due to worries about shortages.

According to official data, exporters have already made sworn declarations to ship 8.85 million tonnes of wheat in the 2022/2023 season.

(Reporting by Adam Jourdan and Maximilian Heath; Editing by David Alire Garcia and Cynthia Osterman)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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