May 19, 2006

 

Argentina may impose quota on wheat exports or suspend it altogether

                                                                              

     

Argentina may impose a quota on its wheat exports or even suspend it altogether in a bid to keep inflation under control, according to media reports from the country on Thursday (May 18).

 

Reprots indicated that the idea is being studied by the  Agriculture Secretariat. However, Cabinet Chief Alberto Fernandez, a senior government official, denied that any limits were being considered.

 

Key officials at the Agriculture Secretariat told Dow Jones Newswires on Wednesday that they knew nothing about such a plan. An official said that the export markets often have little to do with domestic prices.

 

Last year Argentina exported 10.75 million tonnes of wheat, worth US$1.321 billion, making it the world's fifth largest wheat exporter, according to the USDA.

 

However, sources say that Secretariat officials are often not told about new policy initiatives.

 

Argentina's president has become much more involved in price-control policies so lower-level government officials were often unaware of new policies until they are announced.

 

Local media reported Thursday that the government planned to limit wheat exports to between 7 million and 8 million tonnes annually and that Economy Minister Felisa Miceli would be discussing plans with wheat producers.

 

A quota is expected to have severe effects on the country's wheat export for 2006-07. The USDA has initially forecast output at 10.5 million tonnes.

 

Earlier this year, the government banned beef exports to control rising inflation. Gas and oil exports were also restricted.

 

Argentina's inflation rate was 12.3 percent last year and may be maintained at the same levels this year.