Argentina, which considers itself the world’s bread basket, faces having to import wheat next year after the worst planting season on record because of drought, lack of credit and government policies.
Argentine farmers are set to sow about 2.9m hectares with wheat, the smallest area since records started more than a century ago and down 30 per cent from last season’s 4.2m, according to estimates from the Buenos Aires grain exchange.
“Since records started in Argentina more than 100 years ago there is not a single season with a lower planted area,” said Esteban Copati, an agricultural analyst at the exchange. “The wheat-sowing season has started badly, on the wrong footing.”
The exchange said the area sowed could decline even further, with farmers entering the last four weeks of the 2½-month planting season with little prospect of rain.
The decline in sowing stems from three years of government intervention in wheat trading. Farmers were periodically banned from selling overseas, a 23 per cent tariff was raised on exports, and drought eroded production incentives and slashed output.
Argentina is one of the world’s five top wheat exporters, but local executives told the Financial Times that it might be forced to import next year.
“I will be surprised if by next summer the country is not importing wheat,” said an executive representing a large agricultural company. Another added: “The threat of wheat imports is real and looming.”
The financial crisis has exacerbated problems because some farmers have been unable to raise capital to buy fertiliser and seed.