Argentina disallows wheat export permits on low stocks

 

 

Argentina's agricultural trade office, Oncca, is disallowing wheat export permits for 2008-09 to ensure domestic supplies, a person at the office told Dow Jones on Tuesday (January 27).

 

"The government's policy is to guarantee domestic supplies," the person said on condition of anonymity. "It's not that the exporting of wheat is blocked. It's that the industry has not declared the existence of sufficient stocks yet to allow exports."

 

The domestic market requires 6.1 million tonnes of wheat, the person said.

 

"Once the existence of this amount is declared, then export permits will be granted on the surplus in the market above what the domestic market consumes," the person said.

 

He did not estimate when this could happen, nor did he have figures on declared stock levels at present or the quantity of export volumes that have been disallowed. Stocks include amounts held by millers and crushers, as well as grains stored in silos.

 

Last week, Dow Jones Newswires reported that Argentine wheat traders said Oncca rejected wheat export permits because of the low supply.

 

Oncaa's move comes as a prolonged drought cuts wheat yields and production.

 

 

The area harvested was the lowest seen in the last 30 years, according to the exchange.

 

Wheat production is down sharply from the 16 million tonnes grown last season. Estimates suggest domestic demand will be about 7 million tonnes this year, meaning very little likely will be available for export over the 1.2 million tonnes of new crop exports already approved by the national agricultural trade office.