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Argentina wheat exports aim to reach 30-year record

25 January 20193 min reading

The value of Argentina wheat exports is US$ 2.6 billion, 80% more than the last 5 years average and the highest record in this period, even though the number of tons exported dropped. Wheat grain exports reached 11.85 million tons, while the exports of milling industry products (mainly meal) were 722,000 tons.

According to INDEC data, wheat total exports during 2017/18 marketing year reached 12.6 million tons. Wheat grain exports are 94% of the total while the rest corresponds to wheat by-products (mainly meal). Wheat chain exports amounted US$ 2,591 million, the highest value in more than five years.

Wheat export sales from December 2016 to November 2017 were 11.85 Mt (grain), and 722,000 tons of wheat industrialized products, the second largest volume in history.

Initial export projections for the next campaign look equally positive. By December 19, export sales reached 6.4 million tons, which is not only a historical record but it also doubles the previous maximum. Meanwhile, wheat meal export sales exceed 50,000 tons, twice as much last cycle’s sales only 20 days after the start of the season.

The export sector has already purchased 8.2 Mt of wheat, as the industrial sector acquired 975,000 tons. The total 9.2 million tons purchases are almost half the country’s wheat supply until next November.

In addition to the tight available volume, persistent rains that involved hailstorms and late frosts added pressure to local wheat market.

Argentina is a major producer of agricultural goods, agriculture being a key sector both for its production scale and for its exports. The country’s territory and climate offer an extraordinary potential, especially for grain and livestock production. Mauricio Macri, who came to power by the end of 2015, has implemented economic reforms that promote trade and investments. FAO foresees that overall production growth in Argentina will lead to higher exports of agricultural commodities in the next 10 years.

Agriculture constitutes 18% of the GDP and 15 % of the labor. 65% of total exports in 2016 were from agro-industry. Agricultural products are exported to 180 markets. There are 17.800 processing industries in the country. Argentina is a top ten wheat exporter and an important supplier for neighboring Brazil. It is the world’s No. 3 soy and corn exporter. FAO foresees that overall production growth in Argentina will lead to higher exports of agricultural commodities. Argentina is an important producer of soybeans and protein meal, with production of both projected to grow by more than 18% over the coming decade. Strong growth is expected in Argentina’s cereal production, with high growth rates for corn (+31%), other coarse grains (+27%), and wheat (+25%) in that period. And also exports of other coarse grains are projected to increase by 56%, while exports of wheat increase by 42%.

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