Unusually heavy El Nino rains in Argentina this month have left large parts of the country's soy crop affected by fungi and disease, forcing producers to sell at a discount, industry experts told Reuters. Heavy downpours in the first three weeks of April left more than half of Argentina's agricultural region under water at the peak of the harvest season, leading global soy prices up and potentially benefiting US farmers.
Argentina is the world's top exporter of soymeal livestock feed and it is the No. 3 supplier of raw soybeans. As the waters recede in the Pampas, many farmers have been left trying to sell damaged crops. "In general, trucks are leaving the affected zone with between 20 and 30 percent damaged soy, which translates to a price discount of 15 to 25 percent," said Guillermo Moulia, a grains trader in Rosario, the country's leading export port.
When a soy load for export has more than 5 percent damaged grains, a 1 percent price discount is applied for each percentage point of additional damage. If the damage is too high - over 40 percent - the seller runs the risk that the port or warehouse could reject the load. Buyers are seeing damage of between 10 and 40 percent, said Rosario trader Natalia Colombo. Some producers who began harvesting before the rains started are mixing loads to improve the overall quality and keep the price discount down.
But in the worse affected areas around the central province of Santa Fe, damages to the crop are as high as 80 percent, the Rosario Grains Exchange estimated. "The harvest outlook is the most difficult it has been in the region's history," it said. Crops had been left under water for three weeks right at the end of the growing cycle, said agricultural health expert Antonio Ivancovich.
"There will be a lot of deterioration in the seeds due to Alternaria and Fusarium fungi, which are delayed harvest fungi. After ten days of delay in the rain, the damage is serious," he said. Last week, the Buenos Aires Grains Exchange chopped this year's harvest forecast to 56 million tonnes from 60 million, although experts say that will likely fall further once the extent of the damage is clearer. Although the weather is improving, a third of farms are still waterlogged
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