CHINA – Argentina’s wheat traders are positioning to secure their first substantial sales to China in decades, signaling a potential shift in global trade dynamics.
The overtures follow China’s recent authorization of Argentine wheat and corn shipments, a decision that could pave the way for stronger agricultural ties between the two nations. Gustavo Idigoras, President of Ciara-Cec, Argentina’s top crop-exporting group, confirmed ongoing talks and expressed optimism about the opportunities.
This development coincides with Argentina’s promising wheat production outlook.
In the southern half of Buenos Aires province, growers are preparing to harvest an estimated 3.9 million metric tons of wheat in the coming weeks, an 18% increase from the previous season when drought conditions suppressed yields.
Nationwide, the US Department of Agriculture (USDA) projects a wheat harvest of 17.5 million metric tons, up from 15.9 million tons last year.
Sporadic rains during critical periods helped improve plant conditions, mitigating the impact of earlier concerns tied to the La Niña climate system.
Trade dynamics shaped by global politics
China’s potential as a buyer of Argentine wheat is further amplified by geopolitical shifts.
President-elect Donald Trump’s tariff threats against Chinese imports have raised the specter of a trade war, a scenario that previously benefited South American exporters like Brazil.
If retaliatory measures from Beijing emerge, they could enhance Argentina’s standing as an alternative supplier.
“Brazil capitalized on the first trade war by bolstering its agricultural exports,” Idigoras noted in an interview. “Understanding the trajectory of a potential second trade war — its scope, duration, and impact across multiple products — will determine who stands to gain this time.”
Domestic challenges and policy hurdles
Despite these promising prospects, domestic policy remains a hurdle. Argentina’s libertarian President Javier Milei has pledged to reduce long-standing tariffs on crop exports, which currently range from 12% to 33%.
These levies, while a critical source of government revenue, diminish the competitiveness of Argentine products in global markets.
Exporters, including Ciara-Cec, are lobbying for reductions ahead of the next season. However, with the administration’s ambitious fiscal goals, the likelihood of tariff cuts remains uncertain.
Milei’s administration is also looking to revitalize an ailing economy, with the agricultural sector playing a pivotal role.
The bumper wheat crop offers a glimmer of economic relief, particularly as farmers in the key Buenos Aires region reap the benefits of improved yields. Analysts like Gabriel Abregos from the Bahia Blanca Grain Exchange have highlighted the timely rains as a critical factor, ensuring robust plant health just before harvest.
