Argentina in 2022: more foreign exchange and more production, in an uncertain global and local context
The contribution of agricultural exports to the foreign exchange increased to a record high in 2022, despite the drought and macroeconomic imbalances, tax pressure and export duties. Farmers increased production volumes and the agricultural sector as a whole was willing to take advantage of the global rise of the demand for food. However, climate change, bush fires and drought in particular this past year, also heavily influenced production.
The 2021/22 campaign saw a very relevant volume of grains, some 137 million tons were produced. Because of this, the domestic market was very well supplied (wheat milling was very high, but also generated a record flow of exports, taking advantage of high international prices.
According to estimates, exporters ended up liquidating nearly US$41 billion this year, 20% more than last year.
As a result of the Russian invasion of Ukraine, 2022 presented a complex geopolitical scenario that had, obviously, strong implications on the trade and logistics chain. As a result, the prices of raw materials and and energy on a global level went up. For Argentina, this scenario generated an opportunity at the local level to increase agro-industrial production and have a greater export flow. The contribution of agriculture to the economy was one of the largest in recent years. The Gross Agricultural Product was located at US$57,453 million, which represents a growth of 72% in relation to the average of the last 5 years.
Exports and tax collection also showed a strong increase, standing at US$45,091 million and US$19,258 million, respectively. This means, the agricultural sector is a large contributor to the state finances.
Argentine agro-industry is in a position to grow strongly in production. There is large consensus that needs to be done in a sustainable way, preserving the environment, adding value at source and growing strongly in exports, while ensuring internal supply. LAN BUE is in good contact with all stakeholders, both public and private, to involve know how from The Netherlands in this transition.
By 2023
Climate change, mainly drought and (bush) fires, had a negative impact on the production of wheat/barley in 2022. It is projected that this will also have an impact on the incoming harvest and on the flow of products entering the commercial circuit in 2023. This lower production, added to high inflation rates and macroeconomic conditions will surely cause a lower contribution of the agro-industrial sector to the national economy by 2023.
The importance of sustaining good practices and principles of sustainability such as non-removal of the soil, permanent coverage with live crops or decomposing remains, adequate and intensified crop rotation and adequate nutrient replacement and rational use of external inputs is highlighted.
As we heard from various referents of the sector: "The key is not only to produce food but to do it in the best way that science allows us to do it; it is one of the biggest challenges we have for 2023.”
The agricultural team of the NL embassy would like to involve Dutch knowledge and entrepreneurship as much as possible to help meet these challenges. Please contact us if you want to contribute: BUE-LNV@minbuza.nl
