Rain shortages in the country have been felt since mid2022, a year that is 12.8% drier than average
Dirceu Portugal/Fotoarena/Estadão Content 01/12/2019
A dry that affects the agricultural production of the Argentina, the worst in 60 years, is already impacting the country’s economy, with exports falling and tax revenues falling. The lack of rain has been felt on the fertile and vast Argentine fields since mid2022, a year 12.8% drier than average, in a climate that ended this summer with the most extreme temperature records in six decades and severe frosts stops . According to the latest report from Argentina’s Drought Monitoring Board, there are significant yield losses in agricultural activity, delays and a decline in final corn and soybean acreage, in addition to the phenomenon also having a major impact on livestock. Inadequate rainfall affects 172.5 million agricultural hectares, with 8 million hectares managed by moderate to severe drought and 21.7 million cattle at risk, a difficult scenario for one of the world’s major food producing and exporting countries on which much is based its economy on the sector.
In January, exports fell 11.7% from the same period last year, driven by lower sales of wheat, biodiesel, corn and sunflower oil, showing the impact the drought was already having on last year’s crop. Also in January, the budget deficit skyrocketed, with real tax revenues on agricultural exports falling due to the drought. According to calculations by the Institute for Studies on Argentine and Latin American Reality (IERAL), part of the Mediterraneo Foundation, Argentina’s agricultural exports will be around US$37.8 billion in 2023, down from a decline of US$8.4 billion 2022, although the drop could be $6.5 billion if the drought eases or $10.1 billion if the weather worsens.
On the fiscal front, Argentina would spend $7.6 billion on agricultural export rights this year, $2.05 billion less than in 2022, but that could be $1.5 billion if climate change conditions improve , or $2.4 billion if they deteriorate. This is bad news for a country that has to meet ambitious targets for reducing the budget deficit and accumulating foreign reserves this year, agreed in the deal signed with the EU in 2022 IMF (IMF). Experts agree that the drought will affect Argentina’s economic activity, which has been showing signs of slowing since the last months of 2022.
*With information from EFE