Maize exports fall by 40%, the lowest in the last five years

Maize exports fall by 40%, the lowest in the last five years

Argentina’s second largest exporter feels the effects of the drought on its foreign trade, with a drop in exports of US$ 2.275 million. The Dolar Agro ends. A week of uncertainty and commercial paralysis for soya.

With the advance of the late maize harvest, August would have closed as the best month for maize exports so far this season, with 3.3 million tonnes shipped. However, the harvest cut of 33% to 34 million tonnes in the 2022/23 season is strongly felt in the corn foreign trade.

In the first six months of the season, maize shipments fell by 40%. So far in 2022/23, 9.5 million tonnes less maize has been exported than last year. This resulted in a Maize Complex with exports down by US$ 2.275 million compared to the first half of the 2021/22 season. A slight improvement in average export prices for this period, from US$ 253/t to US$ 263/t, did little to cushion this fall.

In this context, external corn sales are already close to the previous equilibrium volume, close to 20 million tonnes. The extension of the equilibrium volume to 26 million tonnes allows the recording of these foreign transactions under the general DJVE regime. Had the previous quota of 20 million tonnes persisted, from 18 million tonnes onwards, new sales would have had to be booked under the DJVE-30 regime and would have had to be shipped within a month.

On the other hand, with the end of August, the Export Increase Programme IV (PIE IV) came to an end. This brought a volume of settlements of US$ 2,129 million. Unlike previous programmes, soya was not included, but maize was, together with products from some regional economies. The main protagonist of this Dolar Agro was the yellow cereal, in the middle of the harvest of late sowing seeds.

With an exchange rate set the week after the Simultaneous and Mandatory Open Primary Elections (PASO) at $350/US$, the differential exchange rate of $340/US$ set by the programme became meaningless. This phenomenon was reflected in a sharp slowdown in foreign sales. The rise in the exchange rate also had an impact on a reduction in the domestic marketing of maize. In the first three weeks of the Dolar Agro, an average of 380,000 tonnes of maize were traded per week. Then came the devaluation, and the two weeks after the devaluation found an average of contracts and fixings close to 117,000 tonnes of maize.

A week of uncertainty and trade paralysis for soybeans

In the last decade we have had five days without a board price and without disseminating estimated prices for soybeans at the Cámara Arbitral de Cereales de Rosario (Rosario Grain Arbitration Chamber). Four of these five days took place in August 2023. The devaluation and the announcement of measures aimed at accelerating the liquidation of foreign currency from external sales of soybeans by the Minister of Economy, but which, at the date of publication of this article, had not yet been implemented, are the two factors that substantially reduced the commercialization of soybeans. Specifically, the economic ministry announced that it will allow 25% of foreign currency to be made available from exports by the oil industry to maintain jobs in the industries, although it is not clear whether this percentage will be applied exclusively to the import of raw material or whether it can be used to improve the domestic purchase price of local producers.

At a press conference, the Secretary of Agriculture, Livestock and Fisheries clarified that the measure is “to maintain the level of industrial activity in the soya chain” and “for 30 days”. However, the regulation has not yet been published in the Official Gazette. In this regard, it is worth noting that in recent weeks the price dynamics have reduced the possibility of importing soybeans for processing and then re-exporting them as agricultural manufactured goods, and that in August the entry of soybeans from neighbouring countries by ship was practically halted.


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