Africa Attracts Argentina for Wheat Trade


Sep 13, 2022 | Agricultural Markets News

Reading time: 2 minutes

Argentina produced a record Wheat crop of 21.8 million tons in the 2021/22 marketing year. The country has three Wheat-planting areas: North, Central, and South (Bolsa Comercio Rosario). The Central and Southern regions contribute more than 95% of the production. The planting season in these regions begins in the second half of May.

Argentina was the 6th largest exporter of Wheat in 2021, accounting for 7.2% of global export volumes. In the first four months of 2022, the country exported 9.5 million tons of Wheat from the record 2021/22 harvest. Sixty to 65% of the Wheat produced in Argentina is exported. Wheat exports make up 5% of the total value of Argentine exports.

In March 2022, the Government of Argentina set a Wheat export quota at 10 million tons for the marketing year of 2022/23 to stabilize domestic prices and combat high inflation. The Wheat export market in Argentina is a private self-regulatory system, with the participation of exporters, flour mills, and Grain elevators, with state surveillance. There is a 12% export tax on Wheat, a mechanism regulating export quotas, and a trust fund.

According to the USDA, Wheat exports for marketing year 2022/2023 are forecast at 12.35 million tons. The Wheat and barley crops are suffering very dry weather. Barley exports in MY 2022-2023 are forecast at 3.7 million tons, the same as in MY 2021-2022. Sorghum exports for MY 2022-2023 are forecast at 1.65 million tons.

Argentine Wheat exports in the first half of the 2021/2022 marketing year, which includes from December to last May, reached a record figure for the time both in volume and in foreign currency, according to a report by the Rosario Stock Exchange.

During the period, Argentina exported 12.7 million tons. In terms of value, due to the good international prices for Wheat in the first semester, Argentina earned US$3.74 billion. The figure exceeds the US$1.6 billion for the first half of 2020/21.

Although Brazil remains the main destination for shipments of Argentine Wheat (it received 2.6 million tons, somewhat below the 2.7 million tons shipped in the previous year’s first half), cereal shipments to Africa are growing fast.

Specifically, according to the shipping agency NABSA SA, in the first six months of the 2021/22 business cycle, about 5.9 million tons were shipped to African coasts, almost triple what was sent in the first half of the previous year.

Disaggregating shipments by continent, against 31% in the same period last year, Africa represented 46% this year. America fell from 52% to 35%. As per AgFlow data, Brazil (3.3 million tons) was the largest export market of Argentinian Wheat in 2021-22 (Oct to Aug), followed by Algeria (0.5 million tons) and Chile (0.5 million tons).

Wheat export volumes by tons

The War Impact on Argentinian Wheat

Usually, due to geographical proximity, African countries tend to receive Wheat from Russia or Ukraine, especially the countries of northern sub-Saharan Africa. However, it is clear that the war that is taking place between the two countries provided an advantage to Argentine production in the current campaign and led several of these countries to opt for Argentine cereal. 

The increase in shipments to Asia also stands out. Argentina exported more than 2.3 million tons to that continent between December and May. However, in percentage terms, there is no significant increase in Asia’s share of total exports. Among the main Asian recipient countries of Argentine Wheat, Indonesia stood out, with more than 1.5 million tons received. In comparison, in the same period of the previous cycle, 0.3 million tons were shipped to that country”, indicated the Rosario Stock Exchange.



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