Argentina’s Grain Exports Could Jump 40%
An analysis conducted by BIMCO suggests that Argentina could be on track to boost grain exports by as much as 40% in 2024.
The analysis, prepared by BIMCO Shipping Analyst Filipe Gouveia, suggests that improved climatic conditions are behind the predicted surge in grain exports.
Gouveia characterises the situation as follows:
“El Niño has brought improved weather conditions for Argentina’s grain crops. The wheat harvest is nearly complete and estimated to be 20% larger than a year ago. Meanwhile, the favourable conditions continue to support the growing of maize and soybean crops.
Though exports should increase across the board, maize is expected to see the biggest boost. A 71% increase in maize exports is expected, equivalent to an additional 17 million tonnes in 2024”.
However, despite significantly improved weather conditions, grain exports will have to contend with Argentina’s new political landscape. Upon election, Argentina’s new president Javier Milei pledged to increase export tariffs for maize and wheat from 12% to 15%.
Is this likely to curtail grain exports in any significant way?
As per Gouveia’s analysis, ‘This is part of a set of emergency measures for the Argentinian economy to be discussed during the first quarter of 2024. Since most of this year’s grain has already been planted, this measure is unlikely to have a significant short-term effect on supply.
In the medium term, higher tariffs could lead to lower grain exports as farmers might allocate less planting area to these crops. However, if approved, many expect this measure to be temporary and that Milei will pursue export friendly policies in the long run. In turn, this would allow Argentina’s grain exports to rebound to levels seen during 2019-2022’.
Based upon this analysis, it does indeed appear that Argentina’s grain exports will be considerably higher this year.
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- Andrew Yarwood