January 13, 2011

Argentina to double wheat exports after government lifts restrictions

Wheat exports from Argentina, South America's biggest producer of the grain, will more than double this year as the government removed restrictions on wheat sales, the Agriculture Ministry said.

Argentina will export 8.2 million tonnes of wheat this year, up from 3.2 million tonnes last year and 5.1 million tonnes a year earlier, the country's Agriculture Ministry said. The announcement followed a meeting between Agriculture Minister Julian Dominguez and the country's four biggest farmers groups in Buenos Aires.

The government of Nestor Kirchner, President Cristina Fernandez de Kirchner's husband and predecessor, began curbing grain and meat exports in 2006 to make food cheaper and more abundant in the domestic market. Farmers went on a four-month strike in 2008 to protest the policies, putting up roadblocks on highways throughout the Pampas agricultural zone and creating temporary food shortages in Buenos Aires.

"We were demanding more than this," said Omar Barchetta, an official at the Argentine Agrarian Federation seeking an end to the bureaucracy on wheat sales. "We have to see what the government does next."

The government lifted the restrictions after farmers increased pressure to remove the ban before presidential elections in October.

An estimated two million tonnes of the grain haven't yet been sold because of the export restrictions, according to estimates by the Agrarian Federation.

This season's output is forecast to be 14.5 million tonnes, almost double the previous year's 7.5 million, according to the Buenos Aires Cereals Exchange.

Argentina's 2010-2011 wheat crop is still being harvested. Wheat prices climbed 1.71% yesterday to US$7.72 a bushel on the CBOT. The grain is up 33% in the past year as a drought cut production in Russia and dry weather threatened the US winter crop.