Russia-Ukraine: Effects on Argentine agriculture

  • Russia & Ukraine account for 78% of world trade in sunflower oil, 28% of trade in wheat and 19% in corn. The restrictions could be translated into an increase in prices, but also into high volatility.
  • In the short term, the exported value by Argentina could increase, as a consequence of the increase in prices, by approximately USD 1,800 million dollars. Result conditioned to the capture of current prices, and to the quantities of grains finally produced in a scenario of water deficit.
  • The outlook is also bullish for agricultural input markets, with pressure on both fuels and fertilizers.
  • The value of imports of fuels and agricultural supplies would also increase, negatively affecting the trade balance, and limiting the possible profits that producers could capture with respect to the higher price of commodities.

Impact on Argentina

Argentina has already marketed a good part of the 2021/22 harvest, especially wheat. According to data from the Ministry of Agriculture, affidavits of sale abroad (DJVE) have already been registered for 45% of 2021/22 exports. In wheat, practically 95% of exports projected for this campaign already have DJVE, and in the case of corn the percentage rises to 60%. The percentages are lower for the rest of the products. The tons already committed for foreign sales do not benefit from the recent price increases.

If we assume that the rest of the tons projected for exports can capture current prices, the increase in the value of exports as a result of the conflict would be USD 1.8 billion, which is equivalent to a 5% increase in the estimated export value for 2021/22. Compared to the previous campaign, it would generate an additional USD 3.6 billion, an increase of 10%.

Impacts are expected on the import side, via higher agri-input and energy prices. In 2021, Argentina imported USD 2,285 million of fertilizers and fertilizers (INDEC), mainly 1,074 million. Nitrogenous USD and 1,098 combined with two or more elements. Regarding energy, the balance was negative for Argentina by 630 million dollars during 2021, and would increase to 3,700 million dollars during 2022, according to private estimates. The recent rise in prices would not generate responses from the local supply of Argentina, aggravating the projected deficit.

Although the contribution in exports that the war escalation in the Black Sea region would make does not seem to be significant, it should be noted that given the high price levels that have been recorded in the agricultural markets in recent months, the contribution of the agribusiness sector to the Argentine exports would be a record again in 2022. Until now, prices would compensate for the fall in quantities as a result of the drought.

The levels of uncertainty are very high, both in terms of prices and quantities. Soybean and corn production in Argentina has been going through a scenario of water deficit that could further compromise harvested volumes and reduce the tons that could be destined for international markets this year. Likewise, it should be taken into account that Argentina currently has a “balance volumes” policy that limits the quantities that can be registered for export in wheat and corn, which today are 14.5 Mtn and 22.5 Mtn, respectively.

Thinking about the 2022/23 campaign, which will begin to be sown in May with wheat and barley, the current grain price levels represent an opportunity to expand the sown area and increase production and exports. It will be important to monitor the prices of agri-inputs that, offsetting the positive effect of the high prices of exportable commodities, could affect the input/output ratio and investment in technology. The signals received by the producer in relation to domestic policies will be decisive, which should generate a framework that encourages the production, marketing and export of grains.

Beeld: ©BUE LNV

Impact on Argentina’s Fruit Market:

During 2021, Argentina exported to Russia the equivalent of US$680 million, of which 95% are agricultural products. Moscow is the main destination for bovine offal and is among the top three buyers of dairy products, lemons and Argentine pears. In addition, it is one of the main markets for peanuts, hake and shrimp, according to data from the Ministry of Foreign Affairs, International Trade and Worship.

Due to the break in the balances of the international markets that caused the exchange parity to go from 75 to 130 rubles per dollar in just 30 days, many of the productions of these regional economies became unprofitable and grant negative margins once Discounted costs and freight. The main problems detected by the 400 exporting companies to these markets are:

- Renegotiations of contracts due to devaluation of the Ruble.

- Blocked Payments.

- Cost increases due to logistical problems.


Due to the war, a drop in lemon sales is expected, which would generate a sharp reduction in exports from northwestern Argentina. From the sector they express their concern since in the next few weeks the harvest of the fruit will begin and later the shipments to Russia and Ukraine.

Pears & Apples:

30% of the exports of Argentine pears & apples that were destined for Russia would not be carried out due to the invasion of that country to the Ukrainian territory.

The apples and pears complex, in 2021 exceeded $45 million exprts. Pear is the main one, with about 90 thousand tons a year. In 2021 there were 87 thousand and in 2020 94 thousand tons. Apples, round about 12 thousand tons per year. The months with the highest volume of shipments are from February to June.


The war between Russia and Ukraine began to have an impact on Argentine wine exports to those destinations, which account for around 3% of total sales abroad. Based on official data, both countries in 2021 made purchases of wines and musts for 13.2 million dollars. Russia was a major buyer of Argentine bulk wine.

Last year the main products that Russia sold to Latin America were fertilizers, steel, refined oil and Sputnik vaccines, according to the OEC. Far ahead is fertilizers, a sector that concentrates 40% of Russian shipments to the region.

The conflict will lead to a general increase in prices throughout Latin America due to the increase in the price of energy and fertilizers that affects production and transportation costs. According to analysts, Argentina is more fragile facing next rise in inflation, where significant increases in production costs are already in sight due to the high costs of fertilizers and diesel.

The Argentine government is, therefore, studying options to compensate the increase of cost of the processing of wheat and grain. The government seeks to limit the consequences of the increased costs on the internal production of p.ex. bread by creating a Fund that will be filled by the revenues of increased taxes on the export of soybeans. As a consequence, it will be less attractive for soybean producers to start to produce more.

Beeld: ©BUE-LNV

The agricultural team LAN-Cono Sur is working together with local and Dutch partners to address several issues mentioned in this article. For more information, please contact us at