Area of ​​wheat of Argentina would be up to 5.9 mln hectares

25.04.2018

The entity said that the current profit margin for the wheat business is 15 percent higher than in April last year.

Normalization of rainfall levels in key agricultural areas would replenish moisture in many fields. (Image Credit: Reuters)

The area planted with wheat of the 2018/19 season in Argentina would be up to 5.9 million hectares, from 5.7 million in the previous season, thanks to high cereal prices and a forecast climate improvement after months of a severe drought, said the Buenos Aires Grain Exchange on Tuesday.

However, if weather conditions are adverse during the grain planting window - of which Argentina is a major world exporter - the area sown would be 5.4 million hectares, the Bolsa warned in a report.

The entity said that the current profit margin for the wheat business is 15 percent higher than in April last year, which encourages investment in technology.

"The signals of (high) prices for the new campaign, added to the need of the producers to obtain income to overcome the negative impacts of the drought and to finance the next campaign of coarse grains, generate positive incentives from the economic point of view for sowing the cereal, "the report said.

In the 2017/18 season, a severe drought of more than four months hit soybean and corn, the country's two main crops, and generated heavy crop losses and economic damages for local producers.

But industry experts told Reuters last month that a normalization of rainfall levels in key agricultural areas would replenish moisture in many fields and improve the outlook for wheat planting 2018/19, which begins in May.

In the 2017/18 cycle, the South American country's wheat crop reached a record of 17.75 million tons, according to the Grain Exchange.


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