February 27, 2009

Argentine soy prices closed lower on the week Thursday (Feb 26) in line with losses in Chicago and amid tension between the government and farmers.

 

The leaders of Argentina's s four leading farm groups said Tuesday that a start had been made in resolving sticking points with the government, but that many issues still need to be resolved.

 

The farm leaders made the comments upon the conclusion of a meeting with Production Minister Debora Giorgi Tuesday.

 

The government offered to eliminate the export taxes on milk and increase subsidies for beef production. Another meeting was scheduled for next week to address further issues.

 

However, the talks didn't touch on the export taxes on soy or corn, two major sticking points in relations between the government and farmers.

 

Those issues will have to be addressed next week, Rural Society President Hugo Biolcati said.

 

However, Production Minister Giorgi said Tuesday that the government is not considering decreasing export taxes on soy, corn, wheat and sunflower seeds.

 

The farmers launched a series of crippling strikes and roadblocks over four months last year to protest export taxes on grains, limits on grain and beef exports, and other government intervention in agricultural markets.

 

The strikes shut down shipments from Argentina, one of the world's leading grain exporters, and caused food shortages in the cities.

 

Both soy prices and trade volume were weak this week, according to the Rosario Grain Exchange. "Lower prices in international markets and slack local demand ahead of the arrival of the new crop pressured prices and led farmers to resist selling," the exchange said.

 

Local crushers bought spot soy for ARS740 (US$208) per tonne at the Rosario Grain Exchange Thursday, down from ARS780 a week ago.

 

May soy were priced at US$205 per tonne, down from US$215 a week ago.

 

Local corn prices got a lift from higher demand this week as the government approved a large number of export permits.

 

On February 12, the agricultural trade office ONCCA said that it would approve an additional six million tonnes of corn exports.

 

Exporters bought spot corn for ARS400 and ARS410 per tonne at the Rosario Grain Exchange Thursday, up from ARS390 a week ago.

 

April 2009 corn sold at US$113 per tonne, down from US$116.

 

Exporters bought spot wheat for ARS390 per ton Thursday, up from ARS370 a week ago.