April 24, 2007

 

Argentina reopens corn export registry for 3 million tonnes

 

 

Argentina reopened the export registry for 3 million tonnes of corn, Agriculture Secretary Javier de Urquiza told reporters Monday (Apr 23). The registry had been closed since November due to soaring export commitments.

 

At the time of the closure, corn exporters had declared new-crop export commitments of 10.06 million tonnes.

 

Argentina is expected to produce 22 million tonnes of corn from the 2006/07 crop, according to the US Department of Agriculture.

 

With domestic consumption estimated at 7 million tonnes of corn a year, mainly for use as animal feed, some 5 million tonnes may still be available for export from the 2006/07 crop, according to analysts.

 

All Argentine agricultural exports must be registered for export, and a reference price is fixed based on the day of registration. The export tax is calculated based on the reference price set on that day. Agricultural export taxes vary by product, but are generally around 20 percent of the FOB export value.

 

Declared exports of wheat and corn had reached unprecedented levels as exporters have raced to lock in FOB reference prices and export commitments amid uncertainty regarding government intervention designed to limit exports and control domestic food prices, according to analysts.

 

The export registry for wheat remains closed, but the government has begun issuing subsidy payments to wheat millers and growers for the difference between market prices and official reference price set by the government.

 

The government is struggling to keep inflation in domestic food prices under control and has implemented a variety of export limits, price accords and subsidies over the past year.

 

To date, the government has paid out some 34 million Argentine pesos (US$11 million) in subsidies to producers of poultry, dairy, pork, feedlot cattle, and wheat, in addition to wheat millers, to compensate for increasing grain prices, Urquiza said.

 

However, farm groups are still incensed by the government's interventions and are threatening new strikes if their complaints are not addressed.

 

Farmers went on strike twice last year to protest manipulation of agricultural markets by the government.