South American drought could hit agri supplies

SIGNIFICANT world price increases for agricultural commodities are predicted due to South America’s worst drought in at least 30 years, which could hit supplies of maize, soybeans and beef.

Argentina’s soybeans crop could fall under 40 million tonnes compared to a forecast 52m tonnes, followed by a 30% cut back in sowing of winter crops, and forecast wheat production of 16.5 million tonnes could be nearly halved.

Maize production is expected to fall from 22m to 14m tonnes. The cattle herd has been reduced by 25%, due to drought deaths or de-stocking. Estimates suggest that over half a million breeding cows and heifers have gone for slaughter since October.