The Ministry of Agriculture ordered the granting of an exceptional extension for 360 days for wheat shipments, with the aim of alleviating the inconveniences caused by the drought, through resolution 114/2022 published this Wednesday in the Official Gazette.
The measure grants an Exceptional Automatic Extension of 360 calendar days to the Sworn Declarations of Sale Abroad (DJVE) for wheat whose shipping period was between December 1 and February 28, 2023.
Also, it is emphasized that This extraordinary extension will not apply to declarations registered after this period.
As a result of the granting of this extension, The possibility of an extraordinary extension of 30 days granted by the usual system of affidavits is excluded.
“We are going to postpone part of the shipments to extend contracts and, in addition, the producer who fails to comply with these contracts will not be executed. This measure will also allow us to maintain the necessary volume for the internal market”Serge Massa
The resolution also empowers the Undersecretary of Agricultural Markets to dictate “the complementary and explanatory regulations that are necessary” to implement the measure as well as future adjustments that are essential to maintain the normal flow of export operations of agricultural products included under the regime of Law No. 21,453.
The measure was anticipated last Tuesday by the Minister of Economy, Sergio Massa, who indicated that exporters will be allowed to “postpone part of the shipments” of wheat due to the production losses registered due to the drought.in order to, among other issues, “sustain the necessary volume for the domestic market.”
“We are going to postpone part of the shipments to extend contracts and, in addition, the producer who fails to comply with these contracts will not be executed. This measure will also allow us to sustain the necessary volume for the internal market,” Massa said at the end of a meeting with officials. of Industry from all over the country at the Kirchner Cultural Center (CCK).
The extension also responds to a request from the producersTherefore, it should be remembered that days ago, the Secretary of Agriculture, Juan José Bahillo, announced that the export sector had asked the Government to “authorize an extension on shipments.”
“Since bread wheat is the product most affected by this climatic condition, it is necessary to adopt concrete measures in order to contain the consequences that they could cause and their implications in the agricultural export scenario”
Current Drought and Wheat Projections
After the presentation of a report on the drought carried out by technicians from Agriculture and the National Institute of Agricultural Technology (INTA) last week, the official said that it is an “issue that we see as feasible, since it is a measure that can help the planning the exit of the cereal and simultaneously contemplate the supply of the internal market”.
In line with the statements by Massa and Bahillo, the preamble to the resolution indicates that in the wheat projections for the 2022/23 campaign, “it is evident that a substantially lower production is expected” and that “in the face of the extraordinary and exceptional situation It is considered necessary to promote the care of all the agents involved in the grain trade chain”.
“Since bread wheat is the product most affected by this climatic condition, it is necessary to adopt concrete measures in order to contain the consequences that it could cause and its implications in the agricultural export scenario,” the text adds.
According to Agriculture estimates, a wheat production of 16 million tons is expected for the current campaign, compared to the 22 million that were obtained in the previous one.
However, private entities see an even greater drop in cereal production due to the drought and late frosts.
After the formalization of the measure, the Chamber of the Argentine Oil Industry (Ciara) stated that the new resolution generates “a bad omen” because “exporting less is always bad news,” as he stated on Thursday morning through a post on his Twitter account,
? Exporting less is always bad news. This resolution bodes ill in that regard:https://t.co/ZP27EPWiOg
— Chamber of the Argentine Oil Industry (CIARA) (@CamaraAceites) November 2, 2022
However, Ciara agreed that “drought is a climatic calamity that has caused us to lose more than 9 million tons of wheat compared to initial estimates and that this will impact the national export capacity.”
“For this reason, we must work now to ensure that Argentina does not lose buying markets, but rather adapt sales volumes abroad to the low supply of wheat production for the 2022/23 campaign”raised the oil entity.
In this sense, from Ciara they concluded by requesting that “the Government must advance in the dictation of the emergency for wheat producers in the face of this deep crisis caused by the drought.”
