March 26, 2007

Argentina grain production likely to increase
 

Argentina is seen to increase its annual grain production to 120 million tonnes by 2010 from the current 90 million tonnes, a top executive of one of the country's top soy producers said.

Argentina, the world's No. 3 producer and exporter of soybeans, could reach that level of output due to a 50 percent increase in the size of its corn harvests and a 10 percent gain in soy production, according to Gustavo Grobocopatel, director general of the Los Grobo group.

He said reaching the 120 million tonnes could be achieved if prices stay at current levels in three years but if taxes or fertiliser costs go up, it will be attained within five or six years.

The Argentine government estimates the 2006/07 soybean harvest at between 42.5 million and 44.5 million tonnes, with entire production of grains and oilseeds coming in at a record 94 million tonnes.

Grobocopatel's firm, the best known entity of Argentina's soy growth, farms just over 100,000 hectares in the country, which is also a leading supplier of wheat, beef and corn. He also estimated that global soy prices would soar as the United States is expected to plant less oilseed.

Grobocopatel, who recently signed a deal to help Venezuela step up soy production, said the same trend toward corn would also be felt in Argentina.

Argentina's soy production has roughly doubled in the last decade and Grobocopatel said there was still room for expansion in marginal parts of the key farming provinces of Buenos Aires and Entre Rios. He said such growth should be accompanied by greater investment in road building.

That might also include improving waterways so more soybeans could be imported from neighbouring Brazil and Paraguay to take advantage of Argentina's ample soy-processing capacity.