Argentine firms warn of $20 billion hit as drought, frost hits crops

A consortium of Argentine agricultural companies on March 3 said they had slashed their forecasts for this season's soybean and corn harvests due to a historic drought and mid-summer frosts, which they warned could cost the country more than $20 billion.

Argentina, the world's top exporter of soybean oil and soymeal and the third-biggest corn exporter, has been hit by a severe drought described by the Rosario grains exchange in Santa Fe province as the worst in 60 years, Reuters reports.

"Argentina is on track to lose more than $20 billion this year due to agricultural losses caused by a climate disaster that affected most of the productive regions with drought and frost," the CREA consortium said in a report.

The latest estimates mean Argentina would produce 38% less soy and 30% less corn than initially forecast. CREA said the forecasts could be revised further downwards in coming weeks.

On March 2, the Buenos Aires grains exchange said it would in the coming weeks further cut its current soybean harvest forecast of 33.5 million tonnes, without saying by how much.