BUENOS AIRES, – The dryness that blighted Argentine farm areas in December and early January will cut yields of early-planted corn while later-seeded fields have been revived by recent rains, the government said on Friday.
A scorching Southern Hemisphere summer sun has dried up hope that Argentina might replenish global corn supplies after a lacklustre U.S. harvest. The South American country is the No. 2 exporter of corn and the No. 3 supplier of soybeans, which serve as a major source of protein for the world.
In the key farming district of Bragado, Buenos Aires province, rains fell on Jan. 22 and 24, breaking the drought in that part of the Pampas and refreshing late-seeded corn.
«Fields that were sown relatively late, which is to say in November, were in full flowering when the rains came,» the Agriculture Ministry said in its weekly crop report.
«These fields represent 15 to 25 percent of total corn fields in Bragado. But the precipitation arrived too late to reverse the situation for corn that was sown earlier, in August, September and the first half of October,» it said.
Soy plants, which have a longer flowering period which gives them more time to absorb whatever moisture is available, have suffered less damage from the drought than has corn.
Farmers have sown 97 percent of the 5 million hectares to be planted with 2011/12 corn, advancing 3 percentage points during the week, the report said. Soy growers have planted 98 percent of the 18.8 million sectares expected to be sown with the oilseed this season, advancing 3 percentage points in the week.
Argentina’s 2011/12 soy and corn harvests will be smaller than in the previous crop year, the Buenos Aires Grains Exchange said, underlining concerns that the drought might crimp world food supplies at a time of growing demand.
The country supplies nearly half of global exports of soyoil, used for cooking and in the booming biofuels sector.
The scorching December weather was related to La Nina, a cooling of waters in the equatorial Pacific Ocean that tends to dry out South American farmlands and this year threatens to upset commodity markets from corn to coffee.
«In most of 2011 the rain deficit was not very significant. Showers in October and November were close to median levels,» the state-run National Institute for Agricultural Technology (INTA) said.
«But December saw a significant reduction in precipitation which, mixed with high temperatures, caused stress that negatively impacted expected yields,» INTA said in a statement.
The institute sees a 2011/12 corn crop of 17 million to 21 million tonnes and a soy harvest of 43 million to 47 million tonnes.
Sovereign bondholders are meanwhile gauging how drought-related crop losses might hurt tax revenue this year as Argentina tries to dodge fallout from Europe’s debt crisis and slower demand from key trade partners Brazil and China.
The government puts a 35 percent levy on soybean exports. Farmers detest the tax and grumble about lack of government support for the agriculture sector, but tempers have cooled since 2008 when growers rocked the administration of President Cristina Fernandez with massive protests over her policies.
Fernandez, bolstered by a strong-growing local economy, easily won a second four-year term in October. she vows to deepen the unorthodox economic policies begun by her late husband and predecessor as president, Nestor Kirchner. (Additional reporting by Maximilian Heath; Editing by Alden Bentley)