We mainly market wheat from Argentina, but we also have wheat from Brazil, Russia and Ukraie. Currently, the wheat region of Argentina is located in the Pampean region and is divided into seven ecological subregions according to local climate and soil characteristics. The subregions are called: Ecological Subregion of Wheat I, II north, II south, III, IV, V north and V south. This wide region has a temperate climate, with two well differentiated areas: one humid, with an average of 800 millimeters per year, and another semi-arid, with 600 millimeters.
According to the latest calculation of the “Bolsa de Comercio de Rosario”, wheat exceeds all expectations, between November and December 2021 the estimates went from 20.4 to 22.1 million tons. In the penultimate month of the year, the main winter cereal left behind the effects of the heat and lack of water in October. That monthly jump of 1.7 Mt seemed unthinkable, but it is happening, they point out.
From the Rosario entity they underline that it will be the highest production in history, encouraged by “a leap in the level of technology that reached the small producer”. Until now, the largest Argentine production was that of 2019/20 with 19.5 million tons. Compared to last year, which registered 17 million tons, there will be 30% more wheat.
On the consumption side, the USDA projects that globally, it would reach 785 Mt, which would also mark a historical maximum. China and India would remain among the countries that consume the most, with the European Union considered as a bloc also remaining as the third largest consumer.
Finally, on the trade side, for the first time in history more than 200 Mt (204,4 to be more precise) would be traded. According to the agency, Argentine exports would amount to 13,5 Mt, although here it is necessary to make the caveat that the USDA considers not only grain wheat but also the grain equivalent of flour exports. In this way, Argentina would represent 7% of total world exports and would maintain its position as the 7th largest exporter, although with a greater share of the total (in 2020/21 the share of our country is estimated at 5%).
Argentina is one of the main wheat exporting countries, along with Australia, Canada, the United States and the European Union.
I – NOA – Noroeste Argentino (Northwest Argentina)
II – NEA – Noreste Argentino (Northeast Argentina)
III – Centro-Norte de Córdoba (Center-North of Córdoba)
IV – Sur de Córdoba (South of Córdoba)
V – Centro-Norte de Santa Fe (North Central Santa Fe)
VI – Núcleo Norte (North Core)
VII – Núcleo Sur (South Core)
VIII – Centro-Este de Entre Ríos (Center-East of Entre Ríos)
IX – Norte de La Pampa – Oeste de Buenos Aires (North of La Pampa – West of Buenos Aires)
X – Centro de Buenos Aires (Downtown Buenos Aires)
XI – Sudoeste de Buenos Aires – Sur de La Pampa (Southwest of Buenos Aires – South of La Pampa)
XII – Sudeste de Buenos Aires (Southeast of Buenos Aires)
XIII – San Luis (San Luis)
XIV – Cuenca del Río Salado (Saldo River Basin)
XV – Corrientes – Misiones (Corrientes – Misiones)
O Brazil will not have wheat supply problems in the short term due to the war in Ukraine, as Argentina has already signaled that it has enough supply to meet national needs, but prices worry the sector, said the Brazilian Wheat Industry Association (Abitrigo) .
The volume coming from Russia to Brazil is considered very small and there is no record of wheat purchases from Ukraine, said the association in a statement, while the Argentines are the main external suppliers of the Brazilian industry.
About 60% of Brazil’s wheat demand is met by imports and, of this total, 85% comes from a single country, Argentina, whose 2021/22 harvest is estimated at a record 22.1 million tons.
Despite Argentina being a major player in the sector, Russia is the world’s largest wheat exporter and Ukraine occupies the fourth position in this ranking, with the two countries accounting for around 30% of global wheat exports.
In this way, Abitrigo believes that the impact of the war in Ukraine will come to all importers of the commodity and will be in the costs.
“It is inevitable that the Ukraine crisis will directly affect world wheat prices,” she said.
Wheat prices on the Chicago Stock Exchange are trading at 14-year highs.
If the armed conflict continues, the association believes that the suspension of shipments from Ukrainian ports will continue and importers will concentrate their demands on other exporters, such as the United States, Australia, Canada and Argentina – keeping prices at high levels.
“One factor that may alleviate this increase a little, but far from being significant, is the fall in the value of the dollar against the real in recent days, which may offset, to some extent, the recent increases in Chicago,” said the statement. Abitrigo.
“But the trend is that the price level will be very high, in the next four or five months, with a forecast of stabilizing or starting to fall from the month of July/August 2022, with the arrival of the crop in the Northern Hemisphere.”
In terms of supply, Brazil had a record harvest last season, with production advancing 23% to 7.68 million tons, according to the National Supply Company (Conab).
Even so, imports of 6.5 million would be necessary, given an internal consumption projected by the state-owned company at 12.55 million tons.
Also according to Abitrigo, another issue that may impact the price of the cereal is the uncertainty regarding fertilizers, as Russia is one of the largest producers in the world and also a supplier of this product to Brazil.
We offer a complete range of commodities originating in South America.
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