March 12, 2012

 

 

To be able to ensure domestic needs are met, Argentina's government is modifying its unpopular corn export system, scrapping incremental quotas that farmers said depressed prices but keeping a cap on total sales abroad.

 

Agriculture Minister Norberto Yauhar said on Friday (Mar 9) that officials will announce on April 18 the bulk of 2011/12 corn exports to be authorised. The remainder of what can be shipped abroad will be unveiled at a later date.

 

Argentina is the world's No. two corn exporter after the US.

 

Yauhar estimated the 2011/12 corn harvest at 21-22 million tonnes and said eight million tonnes would be set aside for local consumption, which would leave between 13-14 million tonnes for export.

 

"With regard to the corn quota, we're dividing it in two," the minister told Reuters after a news conference, adding that this would give farmers the possibility of "freely selling the products they have declared (to the government)."

 

Previously, the government intervened in the corn trade by granting export permits bit by bit, which farmers said eliminated competition among buyers and hurt prices.

 

A similar reform was applied to wheat in January but it has had little impact so far.

 

Yauhar also announced that another 3.6 million tonnes of wheat had been authorised for export starting on Monday.

 

The minister said the 2011/12 wheat harvest reached a record 16.7 million tonnes, although the official government estimate puts the crop at a much lower 13.4 million tonnes.

 

Agriculture Secretary Lorenzo Basso later clarified that farmers had informed the government in sworn statements that they held 16.7 million tonnes of 2011/12 wheat, but he admitted this could include leftovers from the previous season.

 

Asked if the ministry would raise its official forecast, he said, "we would have to check that estimate, it's likely that part of those 16.7 million (tonnes) include stock or wheat that wasn't declared before," Basso said.

 

He also said this was a transition year for both crops and that the new system for authorising exports would be fully functional next season. The wheat harvest ended in January and farmers are just starting to gather the 2011/12 corn crop.

 

Argentina curbs corn and wheat exports to ensure the population has access to affordable food supplies despite double-digit inflation.