July 23, 2004

Argentina Domestic Corn Demand Seen Tripling By 2010

Argentina, traditionally the world's No. 2 corn exporter, is likely to see a big increase in domestic demand in the years ahead, according to Martin Fraguio, executive director of the Argentine Corn Association.

Domestic demand for corn currently stands at around 30% of total production, or 5 million metric tons annually. But with Argentina's beef, dairy, pork and poultry sectors all set to expand, demand for corn feed could triple to 15 million tons by 2010, Fraguio said in an interview.

"Demand for corn is going to rise," he said. "Production will have to rise to around 30 million tons to meet demand from here and from abroad."

Argentina now exports about 70% of its production.

The country produced 12.7 million tons of corn in 2003-04, according to the Agriculture Secretariat. This is down from a record of 19.3 million ton in 1997-98 and a 10-year average of 14.4 million.

Though production is down, average yields are up, meaning that if climatic conditions are good farmers should not have any problem boosting production.

"Average yields have gone up very rapidly over the past 10 years," Fraguio said. "Yields have gone from approximately 3.0 tons per hectare to 6.5 tons."

"Producers are taking better care of all the little details now," he said. "They're selecting better seeds, looking for better ways to use fertilizers and to manage weeds, etc."

The U.S. Department of Agriculture has forecast Argentina's 2004-05 corn production at 15.5 million tons. Domestic demand is forecast at 6.9 million tons and exports are seen totaling 11 million.