$1 BL lost on “La Niña”

Soy and corn may lose 20 per cent and sunflower, 40 per cent, if no rains are posted in the following days in main farming areas of Argentina. The phenomenon known as "La Niña" brings extremely high temperatures, going as far as to touch 40º, and few rains. It's estimated that Argentina will lose around $1 billion minimum. In Chicago, less crop is already expected. Nobody has become aware of the seriousness of the situation.

Areas affected by drought

High temperatures affecting cereal production may trigger losses as strong as 20 per cent in soy and corn and around 40 per cent in sunflower, if no rains are posted this week in main Argentine agricultural areas. Moreover, dry weather directly hits cereal prices, since in view of less supply and a sustained demand at the global level, quotes are expected to climb. Today Monday, losses are estimated at $1 billion.

The most affected provinces are Buenos Aires, La Pampa, Córdoba, Santa Fe, Chaco and Formosa, where farmers expect 10-millimeter rains so as to recover part of their plantations.

High temperatures

This severe drought arises due to the well-known meteorological phenomenon La Niña, which started a few weeks ago, bringing high temperatures hovering around 35/40º and few rains.

"Sunflower is the most complicated crop, and, whether it rains or not, it won't be able to recover much, since it has grown too much already. However, soy and corn can still be saved because they have not completed the growing process," Jorge Srodek, secretary of the Confederation of Buenos Aires and La Pampa Rural Associations (CARBAP, in its Spanish acronym), explained to Ambito Financiero.

It's worth mentioning that corn is the crop needing the greatest amount of water. "Corn requires around 40 millimetres during the entire campaign to grow without problems. To the present, it has only received a bit more than 20 millimetres. So, it should rain this week. Otherwise, damages will be severe," a farmer from La Pampa explained.

According to the last report of Buenos Aires Cereal Stock Exchange 15.3 millions of hectares have been sown with soy, 91 per cent of estimated total. As regards corn, 2.95 millions of hectares have been sown for grain production for trading, 92.5 per cent of the expected 3.2 millions, surface rising 11.5 per cent with respect to 2006/2007 farming cycle.