Argentina has had a hard time the last twelve months, not just in legume production, but this is the purpose of this report so we will be focusing on that.
Argentina’s farm lands have had both the severest droughts in two decades, frosts and floods all in short order, and this has affected production and exports in an unparalleled way.
The Department of Agroeconomic Information (DIA) estimates a production of only 74,700 tons of legumes will be exported in 2020, 47 percent below even the 2017 season which exported 140,800 tons. The extent of the issue needs to seen against the sowing of a record 1.32 million acres (this excludes soy which is by far the main crop of beans in Argentina).
The drought was not the only issue facing the farmers. The winters deep frost they had in the middle of the season deeply affected and reduced the production yield, sizes and final quality further reducing availability of #1 grade product, making the issue even worse than tonnage produced suggests. This was especially harsh in parts of Cordoba, one of the main growing regions.
However, high increase in demand due to the Covid19 devastation, helped mitigate some of the pain for the farmers, but inflicted it in other areas, especially where contractual obligations were impossible to meet.
The current harvest of chickpeas in Tucuman is good. However, in the North (Salta, Jujuy and other Provinces) yields are very poor and quality is down. Some growers are only harvesting 135kg per acre. Sizing is about 60% 8mm and the rest 7mm and just a very few batches with 9mm.
With Salta being one of the main growing regions for organic beans, this is affecting supply lines seriously. We need to see final figures of Cordoba where hopefully some volume can be picked up.
The other major market factor to keep an eye on is a potential second wave of Covid19. Legumes have proved to show exceptionally strong demand globally and prices are expected to rise, especially because of global depletion of last season’s carry over.
Also, to add to the price pressure is the rise in freight costs. While sea freight has mainly seen disruptions and container unbalance, not only because of Covid19 but because of trade tensions, internal trucking rates are at an all-time high, meaning Canadian and Mexican product is not able to counter the price increases.
Weather forecasts for the new season are looking much more positive. With sowing starting for the new crop, especially in Cordoba, ground conditions are good and high acreage is being planted in anticipation of the high demand. There is no indications by meteorologists that this historic weather disruption will occur again this season and we are hopeful Argentina will once again be the exporter it once was in 2021.