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The price of soybeans soared on the Chicago stock exchange… On Tuesday, February 22, it exceeded the symbolic bar of 600 dollars per ton. Driven by the increase in commodity prices caused by the Ukrainian crisis, this increase is also fueled by the uncertainty linked to the drought in South America. In Argentina, producers fear a historically low harvest.
The northeastern quarter of Argentina has been going through a period of intense drought for many months, which worries farmers, and in particular soybean producers. Córdoba, Santa Fe, Entre Rios: in these provinces which constitute the productive heart of Argentine soybeans, the lack of rain was further aggravated by the high heat in January, when temperatures hovered around 45 degrees.
According to a report by the Ministry of Agriculture, more than 1.2 million hectares of soybean crops have already suffered severe damage and the situation could get even worse. Despite some rain this weekend, hopes for significant precipitation in the short term are slim, in particular because of the persistence of La Niña. La Niña is this climatic phenomenon of water cooling in the eastern Pacific which considerably reduces the probability of precipitation on the Argentine plains.
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The Rosario stock exchange is currently counting on a harvest of 40.5 million tonnes, 10% less than last year, but is ringing the alarm bell and raising the specter of the productive disaster of 2018 when Argentine soybean production fell below 38 million tons. In the absence of significant rainfall in the coming weeks, warns the institution, this scenario could well repeat itself.
The uncertainty linked to this drought, which is also affecting Brazil, is fueling the soaring price of soybeans, in the context of the increase in the price of raw materials caused by the Ukrainian crisis. The two South American giants concentrate a third of world exports, and on Tuesday, the ton of soybeans exceeded the symbolic bar of 600 dollars on the Chicago stock exchange, nearly 200 dollars more than its average value over the last ten years.