Argentina: Barley crop forecast remains at 4.59 mln tonnes despite worrisome rains at the moment

Considerable rainfall continues to fall across Brazil, Uruguay, and Argentina. This is worrisome as harvest has begun and heavy rain on a mature barley crop is never a good thing, RMI Analytics said in their December report.

While the analysts’ production estimate for Argentinean barley remains at 4.59 mln tonnes, very good early yields are reported in SE Buenos Aires province. Where yields are good, the protein appears low (<10%) but there is a range of proteins expected, sources said.

Uncertainty surrounding exchange rates and export tariffs is also hindering trade as new Argentina President Javier Milei has already announced a 50% Peso devaluation versus the USD. The special dollar exchange rate previously in place was scaled back with the news of last week’s devaluation. President Milei has warned difficult times lie ahead to fix the tough economic conditions for the country. Expectations remain that trade will ramp up after harvest when farmer selling accelerates and the new government’s initial economic plans are announced.

Argentina barley prices are mixed as the market adapts to the changing political situation. On top of the Peso devaluation, there remains a complex exchange rate structure in place for exporters and farmers. The result is a difficult environment for both farmers and traders to make pricing decisions. The export licence process was temporarily suspended and rumours were that the export taxes were increasing for grains, from 12% to 15%. However, the licence process has reopened without any announced changes to tax rates but it remains a possibility. Recent rains and more in the forecast should keep farmers out of the market until harvest advances further, while the economic plans from the new government continue to unfold.