Argentina: Barley crop forecast unchanged although more beneficial rain adds to optimism around good start of crop year
More beneficial rain has fallen the past two weeks across Buenos Aires province, which is optimistic for a good start to crop 2024, RMI Analytics said in their early April report. The analysts’ barley crop 2024 forecast for Argentina remains at 4.5 mln tonnes.
Farmers remain concerned about the poor margin calculations for grains (old and new crop), based upon current prices and high input costs. As a result, farmers are holding off the selling of grains with only 50% of crop 2023 barley is sold at present. This is well below the normal level of selling at this time. Farmers await support from the Melei government, to address the unprofitable crop reality through either export tax relief and/or a reduction in import tariffs on crop inputs (herbicide tariffs were recently reduced significantly). Recently, President Melei stated a further peso devaluation is not expected in the short-term as a focus remains on reducing inflation and its impact on the economy. Interest rates are expected to drop, which would offer farmers some relief.
Exports are forecast to drop slightly (0.1 mln tonnes) as shipments to China drop and create a need for South American destinations to replace any lost export volumes.
Industry observers note a slight increase in Argentina’s FOB barley prices in a mostly quiet market, although there have been buyer inquiries in the market for malting barley (non-China) and a recent tender awarded a cargo (30 thousand tonnes) for deferred shipment to Colombia.
Across all Argentina, barley selling is at very low levels on a weekly basis, making it very difficult for traders to assemble the tonnage required for a bulk cargo equivalent. FAS prices are higher, in an effort to spark selling, but there has been little change in farmer behaviour, so far. The situation is the same for wheat, corn, soybeans, and sorghum. At some stage, this lack of selling is expected to break, when farmers start to incur input costs related to seeding 2024 crop.
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