Argentine firms warn of $20b hit as drought, frost hits crops

A consortium of Argentine agricultural companies on Friday said they had slashed their forecasts for this season's soybean and corn harvests due to a historic drought and mid-summer frosts, which they warned could cost the country more than $20 billion.

Argentina, the world's top exporter of soybean oil and soymeal and the third-biggest corn exporter, has been hit by a severe drought described by the Rosario grains exchange in Santa Fe province as the worst in 60 years.

"Argentina is on track to lose more than $20 billion this year due to agricultural losses caused by a climate disaster that affected most of the productive regions with drought and frost," the CREA consortium said in a report.

CREA expects a soybean harvest of 31.2 million tonnes for the 2022/23 season, down from an initial forecast of 50 million tonnes, it said in a statement. Corn farmers are forecast to produce 38.6 million tonnes for the season, compared to the 55.2 million tonnes estimated six months ago.

The latest estimates mean Argentina would produce 38% less soy and 30% less corn than initially forecast. CREA said the forecasts could be revised further downwards in coming weeks.

On Thursday, the Buenos Aires grains exchange said it would in the coming weeks further cut its current soybean harvest forecast of 33.5 million tonnes, without saying by how much.