Rains swept through parts of Argentina’s grains belt early Wednesday, providing some relief to corn and soy fields parched by weeks of dry weather, while farmers clamored for government aid.
The drought has shrunk Argentina’s corn crop, which the world has been counting on to replenish international supplies after a disappointing U.S. harvest. The South American country is also a major soy exporter.
“The rains were not heavy but they were significant considering the dryness that had been with us, in the worst areas, for 50 days,” said Martin Fraguio, executive director of Argentina’s main corn industry chamber Maizar.
“The drought has ended. Farmers slept better last night than they have in a long time,” he added. “It is possible that we may get more showers today, if the stormfront stays where it is.”
Forecasters are calling for another front to move into Argentina’s grains belt on Tuesday of next week.
Chicago grain futures had been pushed higher by the bad weather in the world’s No. 2 corn exporting country.
“It rained 20, 30 millimeters. We needed more than 100,” said Fabian Martin, who operates a small corn and soy farm in the Pampas town of Carlos Casares in Buenos Aires province.
“But crops have already been very punished, principally corn,” Martin said. The drought has cost him up to half of his corn crop and about 20 per cent of his soy.
Growers are taking to the airwaves to pressure the government into providing assistance by suspending export taxes.
Government officials will sit down with growers’ organizations on Thursday to discuss the situation. So far the farm ministry has not promised the kind of help, such as tax breaks, that is being asked of it.
Eduardo Buzzi, head of the Agrarian Federation farm group, chided Agriculture Minister Norberto Yauhar, telling local television that the minister “obviously knew little about the drought.”
Buzzi said, “He should take off his tie and get into the fields to see for himself.”
Farmers complain about the 35 per cent tax the government puts on soy exports. They say such measures are hurting investment in Argentina’s agriculture sector at a time of rising global food demand.
The country provides about 20 per cent of the world’s corn exports, 12 per cent of soybean exports, and nearly half the exports of soyoil used for cooking and biofuels.
But an unforgiving southern hemisphere summer sun baked Argentina’s corn and soy plants this month and last, just as they entered their key flowering stage.
The crop losses could add to fiscal and political problems expected to be faced by President Cristina Fernandez this year.
The popular leader easily won a second four-year term in October, but her government is bracing for fallout from Europe’s financial crisis and slower demand growth from key commodities client China as well as No. 1 trade partner Brazil.
The sluggish world economy could crimp the welfare spending at the heart of Fernandez’s policy mix.
U.S. corn, wheat and soybeans fell Wednesday, weighed down by a firmer dollar and the Argentine rains. But trade was restrained ahead of U.S. Department of Agriculture (USDA) crop reports on Thursday which are expected to indicate some South American corn has suffered irreparable damage.